Local authorities should look harder at their flood insurance cover
Local authorities have failed to heed government advice to review their flood insurance cover, Insurance Times reported last week.
When the Department for Communities and Local Government wrote to the chief executives of all local authorities at the end of last year urging them to examine whether they had enough insurance cover, insurers were predicting a deluge of enquiries.
But, according to Zurich Municipal, the level of demand has increased little.
Yet a report by the Audit Commission looking at the financial cost of the summer’s floods has revealed a wide variance in the level of insurance cover obtained by authorities.
It said the level of cover ranged from very little to almost comprehensive cover, with the proportion of the cost of the floods covered by insurance ranging from zero to 91%. Levels of excess were also high, reducing the payout from insurers.
70% of the cost of the flooding was borne by just four authorities, the Audit Commission added.
What does the study show? Despite authorities’ apparent belief that they have adequate flood insurance cover, the responsiveness of these programmes varies widely.
The Audit Commission’s report gives no reason as to why this may be the case, although it does categorise self-insurance funds within its definition of insurance.
So perhaps authorities need to look a bit harder at the adequacy of their insurance cover.
