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| Flood cover talks at crisis point, say insurers | Flood cover talks at crisis point, say insurers |
| (35 minutes later) | |
| Talks about flood insurance are at "crisis point" and could leave 200,000 homes without cover, according to an insurers' body. | Talks about flood insurance are at "crisis point" and could leave 200,000 homes without cover, according to an insurers' body. |
| Many thousands more householders could see premiums rise if no deal is struck between insurers and the government. | Many thousands more householders could see premiums rise if no deal is struck between insurers and the government. |
| The Association Of British Insurers (ABI) is discussing how to provide affordable premiums in high-risk areas, but says talks are at an impasse. | The Association Of British Insurers (ABI) is discussing how to provide affordable premiums in high-risk areas, but says talks are at an impasse. |
| But the government says there is no deadlock and discussions are ongoing. | But the government says there is no deadlock and discussions are ongoing. |
| A Downing Street spokesman said the government had put a proposal to the ABI which was being considered, however the ABI said there was no new proposal tabled at a meeting a week ago. | A Downing Street spokesman said the government had put a proposal to the ABI which was being considered, however the ABI said there was no new proposal tabled at a meeting a week ago. |
| The row comes as the Environment Agency says some 800 homes have been flooded in the latest storms to hit the UK. | The row comes as the Environment Agency says some 800 homes have been flooded in the latest storms to hit the UK. |
| Solution | Solution |
| An existing agreement, reached in 2008, obliges insurers to provide cover for high-risk properties while the government continues to improve flood defences. | An existing agreement, reached in 2008, obliges insurers to provide cover for high-risk properties while the government continues to improve flood defences. |
| Discussions have been taking place for months to try to make sure the arrangement continues after June 2013. | Discussions have been taking place for months to try to make sure the arrangement continues after June 2013. |
| The ABI wants the government to share the risk for the areas with the most homes at significant flood risk - defined as a greater than one in 75 chance of flooding in any given year. | The ABI wants the government to share the risk for the areas with the most homes at significant flood risk - defined as a greater than one in 75 chance of flooding in any given year. |
| Nick Starling, director of general insurance at the ABI, said that the government had turned down its "elegant" solution. | Nick Starling, director of general insurance at the ABI, said that the government had turned down its "elegant" solution. |
| "Our members are out there looking after people who have been affected by these tragic floods and this means that we want a solution even more now after the difficult events of the weekend," he said. | "Our members are out there looking after people who have been affected by these tragic floods and this means that we want a solution even more now after the difficult events of the weekend," he said. |
| "They [talks] have reached a crisis point. We have had two years to sort this out, during that time the insurance industry's put a massive amount of work and money into coming up with an insurance-led solution and we seem to have reached an impasse." | "They [talks] have reached a crisis point. We have had two years to sort this out, during that time the insurance industry's put a massive amount of work and money into coming up with an insurance-led solution and we seem to have reached an impasse." |
| Insurers want householders to pay an extra £8 to £10 on top of their premiums which would go into a £100m pool used by insurers to cover flood affecting their homes. | Insurers want householders to pay an extra £8 to £10 on top of their premiums which would go into a £100m pool used by insurers to cover flood affecting their homes. |
| Mr Starling said ministers had rejected the proposal of a temporary, interest-free, overdraft for the industry, to help it meet the cost of emergencies in the first few years of the scheme while the fund builds up. | Mr Starling said ministers had rejected the proposal of a temporary, interest-free, overdraft for the industry, to help it meet the cost of emergencies in the first few years of the scheme while the fund builds up. |
| 'Affordable' | 'Affordable' |
| Environment minister Richard Benyon criticised the ABI's timing by raising the argument when people were suffering from the effects of flooding. | Environment minister Richard Benyon criticised the ABI's timing by raising the argument when people were suffering from the effects of flooding. |
| But he added that 5.2 million properties were potentially at flood risk and the government was working hard to find an affordable solution to the issue. | But he added that 5.2 million properties were potentially at flood risk and the government was working hard to find an affordable solution to the issue. |
| He said he did not want to see a huge burden being placed on those who pay insurance premiums across the country or on the taxpayer. There was no "bottomless pit" of government funds, he said. | He said he did not want to see a huge burden being placed on those who pay insurance premiums across the country or on the taxpayer. There was no "bottomless pit" of government funds, he said. |
| There was no deadlock, he added, and the government was open to make sure discussions continued. It wanted a deal that improved on the current agreement. | There was no deadlock, he added, and the government was open to make sure discussions continued. It wanted a deal that improved on the current agreement. |
| A Defra spokesman said they would be very disappointed if the talks broke down "because our door is always open for further discussions". | A Defra spokesman said they would be very disappointed if the talks broke down "because our door is always open for further discussions". |
| "We want to go further than the statement of principles to reach an agreement that ensures both the availability and the affordability of flood insurance for the first time," he said. | "We want to go further than the statement of principles to reach an agreement that ensures both the availability and the affordability of flood insurance for the first time," he said. |
| "The insurance industry and the government continue to work together towards this goal. | "The insurance industry and the government continue to work together towards this goal. |
| "We are considering a number of options to ensure that home insurance continues to be widely available and affordable in areas of flood risk." | "We are considering a number of options to ensure that home insurance continues to be widely available and affordable in areas of flood risk." |
| The Council of Mortgage Lenders (CML) said that a "workable" solution was needed, so households could obtain cover at a reasonable cost, otherwise it could affect mortgage offers. | |
| "If a solution is not forthcoming, then lenders will need to consider how best to approach this issue with their existing customers, and the extent to which it increases their lending risk on new loans," the lenders' group said. | |
| Earlier in the year, a committee of MPs raised concerns about what funds were available to maintain flood defences. | Earlier in the year, a committee of MPs raised concerns about what funds were available to maintain flood defences. |
| It was unclear "where the buck stops" for managing the risk of flooding, a report by the Public Accounts Committee (PAC) said. | It was unclear "where the buck stops" for managing the risk of flooding, a report by the Public Accounts Committee (PAC) said. |
| The PAC said that there was a great deal of uncertainty about whether there was enough money to improve flood defences and protection in the long term, and who paid for it. | The PAC said that there was a great deal of uncertainty about whether there was enough money to improve flood defences and protection in the long term, and who paid for it. |
| Have you been affected by the flooding? Please use the form below to share your experiences with us. | Have you been affected by the flooding? Please use the form below to share your experiences with us. |