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Households could pay £8 on insurance to help flood-risk homes

By Gloucestershire Echo  |  Posted: February 28, 2013

By ROBIN JENKINS

Protection:  Flooding in Tewkesbury Ham   at the end of last year

Protection: Flooding in Tewkesbury Ham at the end of last year

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EVERY household faces having to pay £8 on their insurance to ensure homes at flood-risk in Gloucestershire can continue to get affordable cover under industry proposals.

The estimate emerged as the Association of British Insurers outlined details of plans to MPs at Westminster aimed at providing a future safety net for vulnerable properties.

But giving evidence to a parliamentary inquiry, the industry was accused of "trying to dump risk on the taxpayer" through the proposals being put forward.

The solution being put forward by insurers to provide affordable cover is to top-slice all insurance premiums to create a new funding pot to cover flooding claims – the so-called Flood Re model.

Otto Thoresen, director general, Association of British Insurers told MPs on the Environment Select Committee, that this would need an estimated levy on the low-risk properties of £8 – £5 for building and £3 for contents insurance.

The MPs heard that this cross-subsidy arrangement already existed informally under the current insurance agreement – known as the Statement of Principles – which ends in June.

Mr Thoresen felt it would gain public backing given how unpredictable flooding had now become.

"I think broadly this would be supported," he said.

Dave Witts, of the Tewkesbury-based Severn and Avon Valley Combined Flood Group, was not impressed with the insurance industry's idea.

He called it "surface dressing" that failed to provide a long-term solution to the problem.

"I would have preferred that the industry put their efforts into forcing the Government to do basic flood alleviation measures.

"This would reduce the vulnerability of people and would be proactive, rather than reactive," he said.

But Lucy Tanker, of Cheltenham, said £8 was nothing in the grand scheme of things.

"Really £8 is not a lot of money," she said.

"Think how many people have been affected by flooding here and elsewhere. It's not a lot of money for piece of mind."

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6 comments

  • spindles12  |  February 28 2013, 4:56PM

    I don't see why I should pay extra on my insurance just because some people get flooded. What about the areas that never get floods? I happen to live in an area that isn't on a flood plain and isn't near the canal or river and in the nearly 40 years I've lived there the only bit of "flooding" is a couple of inches at the bottom of the garden when it rained very heavily. I agree that construction companies who build houses where it floods should be charged, as well as Councils who allow the building in the first place. At the moment there are some houses being built in Kingsway and the land immediately next to the houses is still inches deep in water that formed during the floods that happened weeks and weeks ago. If it gets flooded now I wonder just how bad it will be when that piece of ground is built on. Perhaps the builders ought to just leave it as a lake and call it an amenity or a feature.

  • geraint2010  |  February 28 2013, 11:46AM

    Have they really thought this crazy idea through? Yes - given a blocked drain or culvert - floods can happen just about anywhere but are we really all expected to pay for the REGULAR flooding of property located in flood plains? In our tiny village alone a pub, a church and a manor house are among several properties that are blessed by the goddess Hafren/Sabrina on a fairly regular basis! Should this mad scheme go through it will be a green light for massive expansion of flood plain development with all of us picking up the tab.

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  • GlosAnarchy  |  February 28 2013, 11:10AM

    The building industry has had it good for too long, it's about time they paid for their ineptitude. By building on flood planes they are putting the new homes at risk as well as increasing the flood rick for others. The local councils are also complicit in the fact that they allowed development in the first point. So we are all going to pay £8 per year are we or is it just a percentage? All that will happen is that people will find it cheaper to get insurance offshore and more jobs will move abroad!

    |   1
  • JustTrolling  |  February 28 2013, 9:33AM

    Have I misunderstood this? Wouldn't this be like asking me to pay more on my car insurance to subsidise those that live in a high crime area?

    |   5
  • raidermanuk  |  February 28 2013, 9:19AM

    Mr Thoresen said "I think broadly this would be supported," Not so sure about that. An individual has a flood risk property they want to insure. The insurance underwriter assesses that risk and prices it accordingly. Under the new system he will effectively price it as before then lower it to normal rates by asking everybody else to pay for someone else's risk. Bit like every family having to pay more for their holiday insurance so that those who indulge in dangerous sports when on holiday do not have to pay extra to cover their risk. That aside, what will Mr Thorensen do with all the extra money that everyone will pay when there are years with no floods? Give it back? Reduce next years premiums? Maybe you will understand why he supports the system.

    |   5
  • ALChelt  |  February 28 2013, 7:20AM

    AND HOW MUCH ARE THE COMPANY'S THAT HAVE CONTINUED TO BUILD ON FLOOD PLAIN LAND,WHICH AS CAUSED THE ISSUES IN TEWKESBURY!!!!"! I grew up in Tewkesbury,it as always flooded but only what is now called the vineyards,it never use to come over the Aschurch Road at the first sign of rain,I'm not sure if the goverment are aware that concreate does not obsorb water as well as fields!!!!!!!!! IDIOTS.

    |   4

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