A new report released by the U.K.’s Chartered Insurance Institute indicates that losses from flood risks are increasing in the country in terms of hazard, exposure and vulnerability.
“Flooding risks present a major challenge to insurers. It is important they are fully aware of the latest developments, so they can make informed decisions”, stated David Crichton, visiting professor at the Benfield Hazard Research Centre and author of the report.
The study points out that it is not just property insurers who will face greater challenges; floods can have a major impact on motor and liability insurers too. One area highlighted is the potential impact on professional indemnity insurance, especially the implications of the new Housing Bill in England and Wales and the requirement for “seller’s packs” which will be expected to indicate future flood risks. “Will the surveyors who prepare such packs be able to obtain professional indemnity cover?” asked the CII.
The report indicated that “More than 200,000 houses in Britain could become uninsurable due to the flood risk, while many more households can expect big increases in their premium each year as flood mapping and modeling improves. Yet in England and Wales, property developers are still being allowed to build in flood hazard areas.
“By contrast,” Crichton indicated, “in Scotland flood plain development has almost ceased, thanks in large measure to the willingness of local Scottish planners and the Scottish Executive to listen to advice from the insurance industry.”
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