Floods spark home insurance warning

Insurers have warned that some people could be turned down for home insurance if plans to build new homes on flood plains go ahead.

The Association of British Insurers (ABI) joined opposition MPs in campaigning for more information about the extra £200 million promised for improving flood defences. The ABI also protested at the government's refusal to veto the possibility of building new homes on flood plains.

Home insurance will be increasingly difficult for homeowners on floodplains to afford as climate change causes more floods along the lines of the one seen in the past few weeks across the UK. There are concerns that building more properties on floodplains will put a further burden on the home insurance industry to bear the costs of floods.

Malcolm Tarling, of the ABI, said: "We don't want any building on flood plains at all.

"If a property is build on a flood plain with inadequate defences, insurers will have to consider whether they can offer new customers cover.

"We have said we will offer cover to existing customers if the government lives up to its end of the bargain and improves flood defences."

Previously the ABI has been uneasy about challenging the government, but has now broken its silence as the potential bill faced by the home insurance industry continues to grow.

This news comes as the latest estimates put the damage caused by the recent flooding at over £2 billion and as the ABI warns that home insurance claims will be worth "hundreds of millions of pounds".

The ABI estimates the average home insurance claim after a flood to be between £15,000 and £30,000.

According to the Environment Agency, as many as 900,000 houses at risk of flooding are not covered by home insurance.

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