Floodplain maps - will your home be uninsurable? (December 2000)

An insurance underclass will not emerge from the recent floods, insurers have insisted, as floodplain maps released by the Environment Agency last week showed two million properties are at risk.

The agency responsible for flood warnings has put floodplain maps of England and Wales on its website so users can enter their town name or postcode to check if they are one of the five million people who are at risk of being flooded.

British Market Research Bureau data has shown that more than half of the people who live on floodplains are unaware of their at-risk status. Last month insurance industry represen-tatives, including Association of British Insurers (ABI) director general Mary Francis, met with government ministers to allay fears that high flood-risk areas may become uninsurable.

Following the meetings, Treasury Economic Secretary Melanie Johnson said: "The industry made it clear that it is keen to provide continued insurance cover for homes and businesses around the country. It is essential that this is achieved without penalising existing policyholders unfairly."

In a recent edition of the British Insurance Brokers Association magazine, brokers agreed that insurers had provided good service following the floods. But they warned it was too soon to say how much premiums might rise and they called upon planners to act more responsibly by not allowing homes to be built on flood plains.

This call was also made by the ABI, as it welcomed the new availability of the floodplain maps. "To enable insurers to continue providing widespread, affordable cover for policyholders, including those in flood-vulnerable areas, there need to be good flood defence strategies and adequate investment in flood defences," Francis said. "Sensible planning guidance of building on floodplains also needs to be implemented." This will be of little comfort to those who already live on floodplains, but insurers have played down the importance of the maps in setting premiums. Axa's intermediary household manager Tom Pejnovic said the maps were used in conjunction with the Halcrow reports on river and coastal defences, Environment Agency and National Rivers Authority information and statistics collected from the millions of policies sold by Axa over many years.

Pejnovic said he did not know of any insurer that had refused cover to a flood-prone resident, but said that premiums for houseowners who were clearly at risk of repeated floodings would rise. "Premiums inevitably will have to go higher in one or two areas but it's a big industry and there will always be at least one or two that will take on the risk," he said. "Everyone should be able to get insurance."

Pejnovic's opinions, and the methods used by Axa to set premiums, were echoed by Allianz Cornhill, Eagle Star and Norwich Union spokespeople. "From an insurance perspective, there's no need to panic if your house appears on the floodplain map," the Allianz spokesman said. "There are no new areas that come as a surprise to insurers."

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