Friday, 30 January 2015

Flood insurance scheme given go-ahead by EU

South East Liberal Democrat MEP Catherine Bearder has welcomed the news and said it will complement efforts to boost flood defences in the area.

Due to come into force in the second half of this year, the "Flood Re" scheme will allow insurers to put the flood risk aspect of a home insurance policy into a common fund that will then pay out any subsequent flood claims. This will help make sure people living in high-risk flood areas are still able to insure their homes at an affordable price.

The EU Commission had to approve the scheme to make sure it did not break EU rules on state aid. It concluded that insurance for flood-risk homes would not be adequately provided by the private sector alone and so government intervention was justified. It also pointed out that the UK government is investing heavily in flood defences, which will reduce the cost of insurance in future and should allow the scheme to be phased out in the next 20-25 years.

Mrs Bearder commented:

"I'm delighted the EU has seen sense and approved this vital scheme, which will ensure people in high-risk flooding areas have access to affordable home insurance.

"After the devastating floods of last year, we must do everything to help people rebuild their lives and make sure we're as prepared as possible for severe weather in future.

"Liberal Democrats are investing in 1,400 flood defence projects across the country.

"These vital defences will help protect high-risk homes from flooding in future but in the meantime we need to make sure everyone has access to proper insurance."