Action group continues fight for fair flood insurance for householders

A MORPETH group is hoping to be at the forefront of ensuring fair flood insurance for all householders in the UK.

Members of the Morpeth Flood Action Group (MFAG), Morpeth Town Council and the Morpeth and District Chamber of Trade have come up with a new proposal for the way forward on the issue, which expands on their original model.

The revised plan involves a pool of money paid into by high-risk householders, but to enable people to afford insurance in these areas they will only pay a percentage of the premium that they would be responsible for if there were no subsidy measures.

This means that contributions are shared between the industry and people living in areas most likely to flood.

The pool would also have funding from a Community Flood Levy paid by all householders.

The insurance industry as a whole would decide whether the levy would be charged across the board as a flat rate or as a percentage of the complete household insurance premium.

Time is running out to secure a new system of flood insurance because the Statement of Principles, agreed by the Association of British Insurers with the Government to ensure cover continues to be provided for flood risk properties, will end in 2013.

MFAG Chairman Alan Bell said: “We’re extremely worried that if nothing is agreed to replace the Statement of Principles we will be left with a pure risk-based system, which will increase insurance costs throughout the town and other parts of the UK.

“This brings with it a real threat of community blight because many people who are already struggling to get reasonable cover will be priced out of it altogether.

“We felt that we needed to do something and our first model established the principle of a pool of funding to cover flood-related claims.

“However, there was no pressure on insurance companies to share the risk and no financial incentive for the policy holder to improve resilience or introduce resistant measures, so we accepted that it needed some revision.

“There is now a combination of subsidy from the insurance industry and householders in low-risk areas with contributions from those in high-risk areas.

“But to make it as fair for them as possible, they would pay only a percentage of the risk-related premium above a threshold to be determined by council tax bands.

“This threshold would be determined by the Government, which will also need to make sure that insurance companies are following the model.

“Hopefully, our proposal will be discussed in detail by all parties and help to get something agreed before it’s too late.”

Mr Bell will present the Morpeth document to Defra officials today and it has received backing from the National Flood Forum, other flood groups in the north of England and academics.

Wansbeck MP Ian Lavery has distributed it to other MPs and copies have also been sent to the Scottish Parliament and the Welsh and Northern Irish assemblies.

Details of the revised plan and background information will be available later this week at www.morpethfloodaction.org.uk/html/home_page.html