Flood debate raises insurance concerns

Tuesday evening's second reading debate on the Flood and Water Management Bill saw the insurance industry come in for criticism for steep rises in excesses and premiums for people in flood-prone areas.

MPs from all three main parties took the opportunity to air their concerns about insurers taking advantage of policyholders who are effectively trapped into dealing with a single insurer. While they acknowledged that insurance companies had agreed to continue insuring anyone in a flood-risk area who they already had on their books, they pointed out that this frequently left people with nowhere else to go. With many examples to hand of excesses rising above £10,000, the MPs argued that this was almost leaving people uninsured.
There weren't, however, any calls for action to be taken against the insurance industry to force them to offer cover at uneconomic rates and it seems unlikely that any amendments will be put to the bill during its committee stage to take us down this road. What we might see is the Department for the Environment, Food and Rural Affairs (DEFRA), looking at the suggestion from Labour MP Ian McCartney that the solution might be a collective insurance scheme administered through the water rates, rather like the insurance-with-rent schemes for council tenants.
The bill itself was given an unopposed second reading with almost every speaker, despite a few reservations, wanting to see it reach the statute books as quickly as possible.
Reblog this post [with Zemanta]

Posted by David Worsfold on December 17, 2009 12:21 PM | | Comments (1)

Tags: | |

Previous Comments (1)

It is a very difficult situation, human behaviour when it comes down to it is driven by profit. The insurers are not going to want to cover individuals with a +100% claims rate, as very soon many would not be viable business ventures. Where lies the control, without any intervention it could leave many out of pocket and a long term effects would see many vacating these flood prone areas.

Posted by personal insurance | February 1, 2010 12:17 PM

POST A COMMENT

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)









Search this blog:

About the Author:

David Worsfold

David has been a financial journalist for 30 years and is currently Group Editorial Services Director at Incisive Media.

Recent comments:

Tag cloud:

Follow me:

© Incisive Media Investments Limited 2010, Published by Incisive Financial Publishing Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and Wales with company registration numbers 04252091 & 04252093

About us:

Jobs:

Related websites: