Five questions about... Flood insurance

Are insurers trying to wriggle out of paying?

No, but they are warning of potential huge rises in home premiums or the withdrawal of flood insurance altogether.

Why would they do that?

An agreement made between the insurance industry and the Government in 2000 that ensures flood-prone properties can continue to be insured comes to an end next June.

Can't they simply set up a new agreement?

The two parties have been round the table for years but talks have reached an "impasse", according to the Association of British Insurers. It blamed the Government's refusal to consider a temporary overdraft facility to a proposed not-for-profit special insurance fund for the 200,000 high-risk households.

So what will happen next?

Talks continue with both parties keen to reach a solution but neither side apparently prepared to give ground. The sticking point is the cost of covering the risk of flooding at many homes, especially those built on flood plains.

So will people flooded this week get help?

Yes, but they are likely to be refused cover in the future until a workable agreement is reached. If a claim is rejected for any reason, you can take it to the Financial Ombudsman Service by calling 0800 023 4567.

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