Households could pay £8 on insurance to help flood-risk homes
EVERY household faces having to pay £8 on their insurance to ensure homes at flood-risk in Gloucestershire can continue to get affordable cover under industry proposals.
The estimate emerged as the Association of British Insurers outlined details of plans to MPs at Westminster aimed at providing a future safety net for vulnerable properties.
But giving evidence to a parliamentary inquiry, the industry was accused of "trying to dump risk on the taxpayer" through the proposals being put forward.
The solution being put forward by insurers to provide affordable cover is to top-slice all insurance premiums to create a new funding pot to cover flooding claims – the so-called Flood Re model.
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Otto Thoresen, director general, Association of British Insurers told MPs on the Environment Select Committee, that this would need an estimated levy on the low-risk properties of £8 – £5 for building and £3 for contents insurance.
The MPs heard that this cross-subsidy arrangement already existed informally under the current insurance agreement – known as the Statement of Principles – which ends in June.
Mr Thoresen felt it would gain public backing given how unpredictable flooding had now become.
"I think broadly this would be supported," he said.
Dave Witts, of the Tewkesbury-based Severn and Avon Valley Combined Flood Group, was not impressed with the insurance industry's idea.
He called it "surface dressing" that failed to provide a long-term solution to the problem.
"I would have preferred that the industry put their efforts into forcing the Government to do basic flood alleviation measures.
"This would reduce the vulnerability of people and would be proactive, rather than reactive," he said.
But Lucy Tanker, of Cheltenham, said £8 was nothing in the grand scheme of things.
"Really £8 is not a lot of money," she said.
"Think how many people have been affected by flooding here and elsewhere. It's not a lot of money for piece of mind."