Product category:
General insurance
News Release from: Defaqto | Subject: Home insurance
Edited by the Insidemoneytalk Editorial
Team on 20 June 2008
Defaqto comments on ABI's calls for more
flood prevention
Defaqto's Brian Brown, Head of Insight, comments on the ABI's calls to reduce flooding, he says:
"It is no surprise that the widespread flooding of summer 2007 is having an impact on the home insurance market "It is clear that the Government, Insurers and Mortgage Providers must come together to find a way to balance paying out billions on flood claims against the cost of flood prevention activities
This article was originally published on Insidemoneytalk on 14 Dec 2007 at 8.00am (UK)
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With the prospect of over half a million homes becoming uninsurable it is vital that action is taken as soon as possible.
The flooding of 2007 cost the insurance industry over ?3bn, and that money comes from the premiums paid by customers.
; If flooding becomes more common, and the insurance industry is required to carry on paying out for the clean up each time, we are faced with three choices: 1.
Make all customers pay a lot more for their home insurance; or 2.
Make those in flood risk areas pay massively more for their insurance; or 3.
Stop providing flood cover to those homes most at risk.
All three of these options are unpalatable, and the last one could have a devastating effect on the housing market.
"Uninsurable homes are unmortgageable homes and therefore almost unsellable", says Brown.
"With the housing market likely to be in a fragile state for some time this clearly needs to be avoided, and all of the interested parties need to agree a common way forward as soon as possible.".
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