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Premium idea


As an engineer in flood management, I find it frustrating that insurance companies appear to have little regard to the risks of property flooding when setting premiums, or even the award of payments for damage.

In my experience in the UK, Australia and to a lesser extent, Hong Kong, the premiums for flood damage and the treatment of claims, bear no resemblance to the actual risks due to location.

The risks of flooding can be predicted within fair degrees of confidence, but I acknowledge that the calculation of risk does take time and money. By comparison, the risk of burglary can be estimated relatively cheaply from police records, but I would wager that the estimated risk of burglary is far less reliable than the risk of flooding.

What is needed is a meaningful dialogue with the insurers, hydrologists, engineers and government to consider a program of flood mapping. If we could identify those areas at risk from, say 10 year or 100 year floods, then the necessary planning restrictions could be imposed and the appropriate premiums levied.

Only when these two components are included does the estimation of cost/benefit for a particular flood defence scheme become meaningful.

Martin Jacobs (M)

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