The Statement of Principle due to expire on 1 July 2013 is a trade off between infrastructure investment in flood defence and affordable premiums for customers. Failure to renew a similar future trade off will affect approximately 200,000 homes in and around flood plains in the UK.
Mohammad Khan, insurance partner, PwC said:
“Customers currently affected will see their premiums rise even if they renew before July 2013 – their renewal price increase could be anywhere between 10% and 50%. After July, for households based in flood plains, prices could increase even more, making insuring your home against flood damage potentially unaffordable for many. Therefore an agreement between the ABI and the Government on the future of UK flood insurance is crucial.”
Domenico del Re, head of catastrophe management, PwC added:
“Our message to homeowners is simple, be prudent and prepare for the worst case scenario, which involves no new agreement being reached.
“Households at risk should give consideration to making their homes more flood resilient from 1 July 2013. Typically these changes are not cheap and cost between £20,000 and £40,000, however, your investment may ensure your home is insurable in the future.”
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