Homes will be impossible to sell, if solution not found in time, insurer warns.
Thousands of homes in low-lying areas could become unsaleable if the government fails to agree a flood-defence deal with the insurance industry, a leading insurer has claimed.
The deal struck in 2000 between the ABI and the government expires in June. But talks over its replacement have dragged on and a new system is unlikely to be in place by the end of June.
A temporary extension to the deal has been mooted as a way round the further delays that the required statutory backing is expected to involve.
AXA chief executive Paul Evans warns that families would be unable to sell their homes, obtain insurance or mortgages should a solution not be found in time.
“We are extremely concerned about the impact on homeowners,” he told The Independent on Sunday. “Homes would be unsaleable. There would be the worst of both worlds: people would be trapped in homes that they couldn’t afford to insure and wouldn’t be able to sell.”
Under the deal, the insurance industry subsidises the policies of homes built on flood plains. But insurers argue that the government has reneged on its obligations by failing to invest adequately in flood defences.
Insurers paid out more than £1bn in flood-related claims last year and homeowners have already seen substantial increases in their cover.
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