Widespread flooding across the UK this week shows ‘continued evidence’ of the Government’s inertia and failure to strengthen flood defences which could impact residential and commercial property owners, said Aon insurance today.
Bill Gloyn, chairman of real estate Europe for Aon’s mergers & acquisitions group and president of the City Property Association, said: ‘The widespread flooding of the past few days is a salutary reminder that the UK government is sitting on a time bomb if it fails to protect against floods before insurance is withdrawn from homeowners and commercial properties in high risk areas.'
He said that despite £3bn of claims following the floods of summer 2007 and the subsequent Pitt Review recommendations, the government has ‘failed yet to state how it will strengthen flood defences, let alone take any action’.
‘Many of the recommendations are still on the table, to be considered in 2009. Now we’re seeing a replication of the damage from 14 months ago, with many areas affected for the second or third time within two years, but with no reassurance that even Pitt’s watered down suggestions are being put into place,’ he said.
Gloyn said that because of the costly claims and lack of government action, insurers have now put a timeframe of five years on the once ongoing ‘statement of principles’, which states their intent to maintain flood insurance protection as long as the government implements measures to maintain and improve flood defences.
The revised statement, published in July this year, anticipated that by 2013 the situation between insurers and the government would have been resolved with no ongoing need for any further agreement on the issue.
‘It will be miraculous if the government turns this around following their recent inertia but people need to know of its intentions to protect their homes and businesses. Without any clear idea, it may be necessary to take things into their own hands and implement protective measures themselves,’ said Gloyn. ‘In practice, this worryingly means that insurance simply won’t be available for those high risk properties that need it the most.’