Flood charity the National Flood Forum has urged the government to settle its differences with insurers over flood insurance.
The government and insurance industry have been in talks for more than two years to find a replacement for the “Statement of Principles”, which runs out in June 2013. But there is still no deal to ensure householders and small businesses can get affordable flood insurance once the arrangement ends.
At issue is the need for householders in flood risk areas to obtain insurance. As it stands, it is possible that some insurers will refuse to cover high risk homes.
In an open letter to new environment secretary Owen Paterson, National Flood Forum chairman Charles Tucker said: “Time is running out - talking should stop and action begin.”
He added: “We’ve always said that it is the responsibility of government to establish a clear framework for flood insurance. A completely free market will leave many thousands of high risk properties unable to obtain insurance in future years.”
Tucker said the organisation welcomed government’s recent acceptance of a proposal for a levy and pooling system.
In July Paterson’s predecessor Caroline Spelman said the government was considering a “cross-subsidy mechanism” that would enable insurance companies to raise money from all policy holders to cover the cost of insuring homes at high risk of flooding (NCE 19 July), but no details have yet been confirmed.
Association of British Insurers director of general insurance Nick Starling said the talks between government and the insurance industry were at an “advanced stage”.