The National Flood Forum is dedicated to ensuring that property owners have access to affordable flood insurance in the UK but with 130,000 commercial properties and 1.7 million homes at risk of damage from coastal or river flooding, many property owners may find that their investment will be deemed uninsurable. Arranging or renewing a mortgage may also be difficult for properties situated in flood-prone areas as early as June of 2013, when the current Statement of Principles expires.
The Association of British Insurers (ABI) announced in January of 2012 that it would not renew the Statement, which has been in place since 2000. The ABI claimed that customers in lower-risk areas were being forced to subsidise property owners in higher risk areas under the existing plan. According to the ABI, the following locations had the greatest numbers of properties at risk for flood damage:
Commercial property and home owners alike are facing the potential threat of having their insurance withdrawn and being in beach of their mortgage contracts. In areas which are considered high risk for flood damage, quotes for insurance cover with an excess of up to £20,000 a year are no longer unusual.
The risk of flood damage is a particular concern for property owners in the UK. Recent changes to the planet’s climate have led to more severe and intense rainfall in this part of the world. New developments on low-lying areas near rivers, which are particularly vulnerable to flooding, increases the risk of flooding in areas located further downstream.
The UK is currently spending approximately £800 million per year on coastal and flood defences. Even with this level of funding being spent, an average of £1.4 million in flood-related damage is reported each year.
