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AA Insurance welcomes flood risk agreement

11 July 2008

AA Insurance has welcomed the announcement from the Government and the Association of British Insurers (ABI) that the insurance industry will continue to offer cover to people at risk of flooding.

The agreement will enable insurers to offer cover to new customers at moderate risk of flooding, and will not remove cover from those at significant risk where the risk is managed – however, the deal depends on the government continuing to deliver a long-term investment strategy in flood defences and ensure that the planning system will prevent inappropriate development flood-prone areas.

Simon Douglas, director of AA Insurance which has nearly 1m home insurance customers says: "The Government is well aware that if they don't deliver promised flood defence investment, thousands of homes could become difficult or impossible to insure against flooding, leaving families in homes they could not sell.

"Insurers are responding to the increasing risk of extreme weather and the likelihood that around half-a-million homes could be affected by flash flooding. Insurers are updating their risk assessments – the Environment Agency, for example, is working with insurers on new flood mapping that takes into account the effects of flash flooding.

"The important thing is that although some householders will see insurance premiums rising, they should still be able to obtain the cover they need."

Last year, 180,000 homes were flooded, costing insurers £3bn in claims.

 

11 July 2008