Construction experts last week expressed fears about the extent to which homes in flood risk areas would be covered by a new agreement between the government and the Association of British Insurers (ABI).
Treasury chief secretary Danny Alexander said last week that the Department for Environment, Food and Rural Affairs had reached an initial agreement with insurers to cap insurance premiums for properties in high flood risk areas.
But Royal Institution of Chartered Surveyors director of external affairs Jeremy Blackburn warned that the proposal failed to resolve issues for properties in lower flood risk areas.
“It is quite possible that those living in areas that do not slot directly into [the high risk category] - but are still at substantial risk - will receive minimal cover, if that,” he said.
The ABI defended the new proposal.
“Properties at high risk of flooding will be able to get insurance with a capped premium,” said a spokesman. “Properties that aren’t classified as high risk will be able to get flood insurance in the same way that they do now.”
The agreement will be included in the Water Bill, which had its first reading last week.
It correlates premiums for insurance high risk properties to council tax bands. These premiums will be subsidised from a levy of £10.50 on all insured homes.
Properties in tax band H will be ineligible.
“All households with insurance are already paying a subsidy, but now it will be a set amount,” said the ABI spokesman.
“They won’t be paying more than before,” he added.