The property industry reminded the government yesterday that property without insurance is essentially worthless, as talks to ensure universal flood cover resumed after a month-long impasse. The British Property Federation report that Cabinet Office Minister, Oliver Letwin, and the Association of British Insurers (ABI) resumed talks to find a replacement to the Statement of Principles, which expire next June.
Since 2000 the Statement of Principles ensures every property in the country can access insurance in exchange for state investment in flood defences.?
In November the ABI blamed the impasse in talks on the government?s refusal to consider providing a temporary overdraft facility to a proposed not-for-profit special insurance fund for 200,000 high-risk households which will otherwise struggle to get affordable household insurance when the current arrangements come to an end next year.?Insurers want householders 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.
The temporary overdraft facility would be used to pay claims if there were large-scale floods in the early years of the scheme before it had built up its reserves.
This needs to be sorted out quickly.Without a deal, hundreds of thousands of households and businesses won't know whether they will be able to cover flood risk from next June.
Source: http://www.jondickins.com/2012/12/flood-insurance-talks-resume.html
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