Only local action on flood defence can avoid insurance trap

Two million homeowners in Britain's danger areas risk losing cover, warns William Kay. But insurers and Government must be pushed by lobby groups

Despite hand-wringing and pious sentiments from Government and the insurance industry, a survey by Norwich Union this week shows homeowners are fearful but baffled. They fear the increased risk of flooding, but they are confused by what to do about the danger.

The Government's Environment Agency says two million homes and 185,000 businesses in England and Wales are in danger. They also predict a likely tenfold increase in the risk of flooding this century. One in five householders has been, or knows, someone who has been affected by flooding and almost a third say they worry more about flooding than they did 12 months ago.

But more than 90 per cent of homeowners in some of the highest flood-risk areas admit they have not taken the most basic precautions, such as moving valuables upstairs, and claim they do not know what to do.

In January a two-year amnesty ended, under which the insurance industry promised to cover to all homes while the Government put stronger defences in place. Consequently, more than 100,000 homes in the most vulnerable areas are may not being insured. And without insurance, most lenders will refuse new buyers a mortgage, making these properties unsellable.

But the Association of British Insurers (ABI) says: "About two million homes are situated on flood plains, affecting one in ten households, but the vast majority will still be able to find insurance."

Flood insurance will continue to be offered to flood-risk properties currently protected to the Government's minimum defence standards, and to those properties where plans are in place to improve existing defences by 2007 to bring them up to the minimum standard. Where someone moves home, the existing insurer will continue to offer flood cover to the new purchaser.

John Smeaton, Norwich Union's head of property underwriting, said: "Britain needs to adapt to the danger of flooding because the scale of the problem has escalated to unprecedented levels. Progress has been made by the Government, but flooding is a real risk to the UK, as many thousands of homeowners have unfortunately found out. It's understandable that people feel confused and concerned. But they can help protect their homes from flooding, as well as lobby for change in their area."

Norwich Union, Britain's largest insurer, interviewed 2,200 residents around Britain, including 1,200 in flood-risk areas. They found 75 per cent of the latter said there were no flood defences in place or planned to protect their property. Nearly 70 per cent of all interviewed do not think flood defences give adequate protection.

More significantly, 77 per cent were worried not enough was being been done about flooding and there had not been sufficient progress by Government in the past year. More than 90 per cent want would-be home-buyers to have more flood-risk information.

One in five people at risk have joined or would consider joining a local action group to lobby the Government to do more. It is to spend £411m on the problem this year.

Last month's energy White Paper said further climate change was inevitable and action had to be taken to deal with the consequent dangers, including floods. But in 2001 the Royal Institution of Chartered Surveyors called for the Government to overhaul the system, especially the planning aspect of flood prevention. The RICS said building in the wrong place, such as on a flood plain or runoff areas, can add to the danger by forcing water further downstream and creating problems miles away.

The RICS then called for the appointment of a "flood supremo" who would co-ordinate efforts nationwide. The Scottish Executive took direct action to bolster flood defences north of the border, but in England and Wales the central government has to funnel support funds through local authorities.

Peter Barnett, chairman of the National Flood Forum said: "Our experience shows that, collectively, people can make a real difference at a local level. We continue to campaign to encourage homeowners to form action groups in the fight for flood defences. We believe the best way for local communities is to work in co-operation with the various agencies at local and national level. Norwich Union's campaign helps communities understand the need for active local participation and we support this initiative."

Norwich Union has been involved in several initiatives to help find solutions. For example, the insurer has commissioned a digital map of Britain to help pinpoint and understand exactly which areas of the country are at risk. The map will be used to provide more accurate premiums for individual homes and businesses, according to their risk of flood.

The ABI says: "If flooding causes property damage, policyholders should contact their insurer as soon as they can. Many insurers offer a 24-hour emergency helpline service, which can arrange for repairs to be done as quickly as possible."

The Environment Agency has a free pack containing information on protecting yourself and your possessions plus information on flood-risk regions. Call the Floodline on 0845 988 1188;

For a free copy of Norwich Union's Home and Dry action pack, call 0800 093 0303, or visit www.norwichunion.com/homeanddry