Strain is mounting on government officials to backtrack on ideas to exclude the most costly properties from the new nationwide flood subsidy fund right after insurers withdrew their assistance for the exclusion.
The Association of British Insurers has written to Owen Paterson, setting secretary, to phone for much more properties to be protected beneath the Flood Re scheme.
A lot more
On this topic
IN Uk Politics & Policy
Officials at the Division for Surroundings, Meals & Rural Affairs stated on Monday that the ABI’s intervention would not change their stance. They argue that if costly riverside properties are integrated, bad households would successfully be subsidising the wealthy who chose to dwell on floodplains.
But with David Cameron, prime minister, also supporting a overview of the policy, calls are developing for a rethink – even as the legislation to put into action Flood Re nears conclusion in parliament.
Flood Re is currently being set up to cap the price of insurance for hundreds of 1000’;s of households.
Nevertheless, properties in the Band H council tax band – along with buy-to-allow and newbuild homes – face being excluded from the scheme, even although their residents would have pay out a mandatory levy to fund it.
Without the safety of Flood Re, policyholders are at chance of huge increases in premiums, due to the fact insurers say their existing dedication to universal flood coverage is no longer viable.
The ABI had previously argued in favour of the Band H exclusion, pointing out that ending it would imply a rise in the Flood Re levy for absolutely everyone.
But the trade physique has now reversed its place and is pushing for Band H homes to be integrated.
On Monday, the ABI said it had originally gone along with the exclusion because political objections to subsidising wealthy house owners could have undermined the scheme.
Huw Evans, director of policy at the ABI, explained the body was shifting its position due to the fact it was now clear that Flood Re has cross-party assistance.
His letter to Mr Paterson argues that the winter storms showed flooding can “affect folks irrespective of their Council Tax band”. It acknowledges that policyholders in at-chance Band H properties “could encounter issues” with securing affordable cover.
Bronek Masojada, chief executive of the insurer Hiscox, has complained about a lack of clarity from ministers and the Association of British Insurers about the variety of properties that will be excluded.
About 1,400 Band H houses are at “high risk of flooding”, in accordance to the ABI. But according to Mr Masojada, other exclusions indicate there could be as many as 350,000 houses in high chance places that will not be granted protection below Flood Re.
In a letter to members of the House of Lords final month, he wrote: “When the next flood arrives we will see divisive scenes in which individuals who are subsidising their neighbours but unable to entry flood insurance themselves . . . will be understandably angry with people who implemented this flawed approach.”
Defra mentioned in a statement: “Our aim is to target support to decrease earnings households, as these are the people who are most most likely to be struggling to afford flood insurance coverage.”
Copyright The Fiscal Times Limited 2014. You could share using our report resources.
Please do not cut content articles from FT.com and redistribute by electronic mail or publish to the world wide web.