Home Uncategorized Automobile Association : urges government to not cut spending on flood defences

Automobile Association : urges government to not cut spending on flood defences

0 1

In an open letter to the environment secretary Caroline Spelman, Simon Douglas, director of AA Insurance, said that any cut in spending on protecting flood prone parts of the UK could see hundreds of thousands of homes becoming uninsurable and thus un-mortgageable; and that insurance premiums would inevitably rise for everyone.

Mr Douglas said: “Millions of people are at risk of inundation from overflowing rivers, coasts and estuaries during extremes of weather and that risk is increasing all the time. “The environment secretary is expected to say today (16 September) that the UK must drastically cut its greenhouse gas emissions and that we must prepare for the best and worst cases that a changing climate will entail.

“Despite that, many leading commentators in the insurance industry are concerned that spending on flood defences, and supporting local authorities to help reduce the risk of flash flooding, should be significantly increased, not cut.”

Mr Douglas said the statement of principles, which is an agreement between the Association of British Insurers and the government, currently guarantees that those living in flood-prone areas can continue to maintain insurance cover for their homes. However, the agreement is dependent on continuing investment in flood defence measures by the government. “If spending isn’t maintained, it will compromise the statement of principles, which could see many homes become uninsurable,” he said, adding that the Environment Agency has called for flood defence spending to be doubled over the next 25 years.

Mr Douglas added he is concerned that home insurance premiums could rise rapidly if this protection is removed. “Historically, both home buildings and contents insurance premiums have remained relatively static, according to the AA’s benchmark British Insurance Premium Index, but are showing signs of upward movement. Buildings insurance has on average risen by about 13% over the past year while the cost of contents cover has risen by only 6% over the same period.

“Insurers are concerned about future flood and storm damage claims which are likely to become more frequent and more severe as the climate warms and they will need to increase reserves to be able to pay out for large numbers of future claims. If investment in defences – and that includes ensuring storm drains are kept clear and are improved to remove surface water – is not maintained, insurers will become increasingly fussy about who they insure and premiums will inevitably increase.”

Source : The Post Online