Government hints at flood insurance future

Defra secretary of state Caroline Spelman has admitted that a complete replacement to the Statement of Principles on flood insurance has yet to be found, but has hinted that some progress has been made.

Speaking at an ABI property conference, Spelman said: “I would like to be able to lay before you today the full answer, but I don’t believe the ABI or its members would want me to cut across the ongoing dialogue we are having by commenting on the ongoing detail of our discussions.

“What I can say is that we want to see a solution which benefits those households living with flood risk, particularly those on lower incomes.”

Spelman also revealed the talks had found “the beginning of a solution” and that flood insurance would remain universal and affordable.

Other MPs at the ABI event dropped further hints about what the eventual replacement to the statement would be.

Defra shadow secretary of state Mary Creagh said that there could be some sort of voucher system involved for low-income homeowners making flood claims, but that she thought it would be too bureaucratic. Liberal Democrat MP Stephen Gilbert said there is government interest in a reinsurance solution with capped property premiums.

Earlier this month Defra parliamentary under secretary of state Richard Benyon said that the government was considering being the insurer of last resort for flood claims from low-income homeowners.