Scheme to aid flood victims under way

The eagerly awaited scheme to help homeowners living in high flood risk areas secure more affordable insurance on their properties came into force last Monday (April 4).

Thursday, 7th April 2016, 4:00 pm
Updated Friday, 8th April 2016, 10:21 am
Morpeth floods September 2008.

Flood Re, as the scheme is known, is a world first and has been launched by the Association of British Insurers (ABI). It has been a while in the making, which in many ways is understandable because the people behind the scheme have said all along that they wanted to get it right first time.

As James Dalton, Director of General Insurance Policy at ABI, has been quoted as saying: “People in flood risk areas not being able to access affordable cover was a major concern and why the insurance industry has gone to great lengths to design and create this world-first solution. It is great to see so many insurers being ready to make use of Flood Re from its launch.

“Monday was just the start of the process and we know more providers will join them over time, bringing even more choice for people with homes at risk of flooding.”

I can only echo Mr Dalton’s words and welcome the fact that the industry has responded in what it is hoped will turn out to be such a positive way to address the concerns and worries of literally thousands of people whose homes have been flooded, hopefully including those in Morpeth.

Those of us who have never had to suffer such a misfortune can only speculate as to what a traumatic experience that must be. To have your home and treasured belongings ruined by flood waters, and then have to live in temporary accommodation while the damage is repaired, must be truly devastating.

But then to be faced with the prospect of having to find thousands of pounds to pay insurance premiums, topped by an unrealistic excess on whatever policy they were quoted, must have seemed like the last straw.

I know from correspondence and dialogue with constituents facing such a dilemma that it has been the situation many local people have found themselves in after their homes have been under water on more than one occasion, or indeed in some cases, not flooded at all.

One lady told me she was being quoted more than £3,500 for her policy, with more than double that as an excess payment. For many people that is simply an unaffordable payment, which is why they choose not to take out insurance, only to be faced with the crippling consequences when their homes were eventually flooded.

If there are postcode anomalies which are penalising householders then these need to be ironed out as a matter of urgency.

Since I became Wansbeck MP I have taken every opportunity both inside the House of Commons debating chamber, as well as to lobby ministers and responsible officials, to press for fairer insurance offers for householders in flood risk areas around Morpeth.

At the time of writing this column, however, some concerns were being expressed to me as to whether Morpeth fully met the criteria for local householders to be able to benefit from the scheme.

Recently, I reminded Rory Stewart, Under Secretary for Environment, Food and Rural Affairs, during a Commons’ debate, that whilst Morpeth now has a Rolls Royce flood defence system, we are still having problems with insurance companies quoting excessively high premiums and blaming the Environment Agency for not updating its data regarding the town.

He assured me that through Flood Re lower rate, taxpayers’ insurance premiums would be more affordable and excesses would be capped at £250, and that British insurance brokers would also have access to packages containing more specialised and precise mapping data.

Clearly it is early days, but I will be monitoring the situation along the River Wansbeck as it flows through Morpeth, and would like to hear from any homeowners still facing insurance problems.

Next week I happen to have a meeting with Mr Stewart and I will be seeking clarification that Flood Re will apply to Morpeth. If for some reason he tells me it does not, I will vigorously press for the town to be included in the scheme.

The entry criteria for Flood Re appears to refer to properties in ‘high risk areas’ and I will be seeking clarification that Morpeth continues to fall into that category, despite the completion last year of the £26million flood protection defences. It appears that some insurers may have different interpretations as to what ‘high risk’ actually means.

The association is saying it expects around 350,000 households to benefit from the effects of Flood Re, and we need to know once and for all whether Morpeth homes are included in that figure.

In the meantime, it is advising people to shop around for insurance products to ensure they have the policy that best suits their needs. It adds that householders should not focus purely on price, but advises them to look closely at the cover being offered to them as well.

As a helpful guide, there is lot of information about the scheme, as well as a list of insurers preparing to use it, on the Flood Re website, which also includes an online broker finding service.

It is also worth remembering that householders won’t deal directly with Flood Re, but will still purchase insurance in the way they have always done in the past. Flood Re is not a home insurer itself, but will work behind the scenes with existing insurance companies.

It sounds complicated, but ought to work in favour of homeowners living in areas at high risk of flooding.

What the scheme definitely does not do is cover commercial properties, even though that property may be someone’s home, such as a bed-and-breakfast, or new homes, and that is something we must continue to press for.

Of course, securing more affordable insurance premiums for householders is vitally important, but what we must also do as a nation is to find new ways of preventing flooding, affecting so many properties in the first place.

The past winter months have again dramatically highlighted the scale of the problem, with many households across the country suffering as a result of flooding.

Mercifully, the work done by the Environment Agency to protect Morpeth, with the invaluable financial support of Northumberland County Council, prevented a repeat of the devastating floods we have seen in the past. So many other areas did not escape so lightly, however, and everything must be done to reduce the frequency and severity of flooding incidents across Britain.