FLOODING: Seek to minimise claims

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The recent floods demonstrate that man’s attempts to control extreme weather events are becoming increasingly expensive and futile.

The Environment Agency has identified areas that are at greatest risk.

In the upland areas sites have in the past been designated as natural reservoirs into which excess rainfall can be diverted and allowed to percolate down to the natural underground water level (a low cost flood prevention measure).

The Government and the Association of British Insurers (ABI) have reached a new agreement on principles to ensure that households in potential high flood risk areas can insure their property and its contents against flooding: the Flood RE scheme which takes effect from April 2014.

The ABI will on the basis of an actuarial assessment of the potential flood risk, agree a fair premium level for properties linked to the council tax valuation band.

Property owners will be encouraged to scour the market for the cheapest insurance premiums that meet their requirements and if they are unable to find an insurer willing to insure their property at the ABI recommended level they should accept the cheapest option available.

If that premium exceeds the recommended ABI premium any excess can be reclaimed from the Flood RE scheme. The ABI will set up a ‘not for profit fund’ of £180m topped up by an annual levy of £10.50 on every insured property. Council tax band H properties and any property completed post January 2009 are excluded from the Flood RE scheme.

After this winter the ABI will face claims that will exceed £180m. The annual additional stealth tax levy on properties not facing potential flood risk is not fixed for the next 20 years, the duration of the Flood RE scheme. Over the next 20 years increases will be inevitable. Prevention is better than the expensive mitigation measures that are unavoidable in tidal and fluvial flooding high flood risk areas.

Given that the Flood RE scheme excludes post January 2009 new build properties, planning authorities should amend or write into their local plans policies which prohibit any new build non agricultural property in identified coastal red zones or identified upland sustainable drainage sites.

Planning consent for public infrastructure new build should only be granted if there are no alternative sites available and if all such new build is fully flood resilient.

In areas with significant potential flood risks, planning consent should only be granted if the proposed development sites are appropriately flood risk compliant.

Would a fund of £180m cover the bill for this winter’s floods? How long will the Flood RE levy remain fixed at £10.50? How long will it be before the insurance premiums and/or the excess claims limit become unaffordable?

Residents across South Holland already pay an additional tax through their council tax to fund the work of the local Internal Drainage Boards.

The amount that South Holland District Council can recoup from the Government has been reduced.

Grant in aid from the Government to the drainage board has increasingly been focused on maintenance, not on enhancing our defences.

The drainage board levy on council tax will have to increase. Without property structure insurance lenders would be reluctant to provide mortgages or renew existing mortgage deals. This will depress all property prices.

The Government has made a commitment to keep investing in maintaining flood defences but seems intent on ensuring that those who receive the most benefit should be expected to pay a higher proportion of the costs.

It is in the interests of all in high flood risk areas that their planning authorities, public services, the Government and insurers, together, seek to minimise flood compensation claims. In Boston and South Holland a joint South East Lincolnshire Development Plan will be published. Urge your local councillors to curtail any new developments in high risk zones unless any such new build properties are flood resilient.

Paul Walls