Monday 4 April 2016

"New flood insurance scheme to increase household bills"

From the BBC:

Homeowners living in high flood-risk areas of the UK should now be able to save hundreds of pounds on their insurance premiums.

A new scheme called Flood Re has been designed to cut bills for those whose homes are in danger of flooding. Up to now, thousands of householders have been paying large additional premiums to make sure their homes and possessions are protected. About 350,000 homes could benefit - although thousands will be excluded.

The cost will ultimately fall on ordinary policy-holders, who will pay an extra £10.50 on their premiums on average.

16 comments:

Lola said...

How can I contract out of this?

View from the Solent said...

There isn't a direct link and I can't be bothered to look for it at BBC, so I assume that yhis is one of your satirical minor rewrites of an original article. It is a rewrite isn't it?

Mark Wadsworth said...

L, you're the expert, you find out.

VFTS, apol's. Link now added.

Lola said...

MW Not on general insurance (aka personal lines) I'm not...

Graeme said...

So, is this a disguised incentive to build on flood plains? And this is legal? This is where Brexit starts to founder. The governing class in the UK are either totally corrupt or irredeemably stupid. Do I want to be ruled by either? Maybe I'll just become an economic migrant

Mark Wadsworth said...

G, homes built since 2009 are excluded to avoid that problem. Why they chose 2009 and not "today" is unknown.

Bayard said...

"Why they chose 2009 and not "today" is unknown."

Marginal constituencies?

DBC Reed said...

I thought the principle of insurance was that payments from people not likely to claim balanced out the people very likely to claim: otherwise smokers and drinkers and people with long term or congenital illnesses could not access treatment on schemes like the NHS.

Mark Wadsworth said...

B, good one and just about plausible.

There are more new builds in Labour voting areas and occupiers of new builds tend to be younger and hence not to vote at all and if they do, less likely to vote Tory.

DBC, that applies to compulsory insurance but not to voluntary insurance. And smokers pay double their pro rata share of NHS costs.

I'm not saying that compulsory mass insurance is a bad thing, but it is stepping away from the original model.

DBC Reed said...

@MW what is rather odd is the public motor insurance system that applies in some Canadian provinces.As it is compulsory to have car insurance ,perhaps the public sector should be involved.

Mark Wadsworth said...

DBC, I said the same myself, see second part of this post.

DBC Reed said...

@MW Very interesting post from 2014. (Negative) reference is made in the comments to the South African Road Accident Fund where the "premiums" are, I believe, paid by motor fuel duty . Might not a compulsory flood damage insurance scheme be paid out of LVT? (I admit I haven't thought this through; there are hints of negative LVT with people being paid for landscape disadvantages as well as others paying for landscape benefits.)

Bayard said...

"Why they chose 2009 and not "today" is unknown."

Also possibly this: https://en.wikipedia.org/wiki/2009_Great_Britain_and_Ireland_floods 2009 being when insurance companies started to wake up to the danger of building on flood plains, so anyone who bought a house on a flood plain since then is presumed to have realised that insurance might be a bit of a problem?

OTOH, there were as bad, if not worse floods in 2007 and 1998.

Mark Wadsworth said...
This comment has been removed by the author.
Mark Wadsworth said...

DBC, Mombers used to live there, but that need not be our model. All we say is that third party cover (cost/value about £300 per driver per year) is paid for out of fuel duty, given the admin savings, the cost would fall to £200/car. I'm quite sure that most of the real costs associated with collisions is borne by the NHS and the police anyway, so what's the difference?

Mark Wadsworth said...

B, that seems perfectly plausible to me.