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Westcountry insurer questions Government flood deal

By GDemianyk  |  Posted: February 18, 2014

DowningStreetFlood

Government summit with insurers. Labour said: "Three hapless junior ministers booking a meeting room does not constitute a serious response to the flooding crisis."

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A Westcountry insurer has questioned Government investment in flood defences amid questions over a deal to provide cover for at-risk homes.

Alan Goddard, managing director of Cornish Mutual, said there was “still work to be done” on a pact between ministers and underwriters to insure the properties most in danger of flooding.

His comments, which came as big insurers met ministers at Downing Street to get companies to do everything they can to make things easier for flood victims, follow questions over Flood Re – the deal thrashed out this summer.

As part of the deal, insurers have agreed to provide cover, but there remains unease over cuts to the flood defence budget – which the Government denies. Post-2009 and expensive properties are among those excluded from the deal, which sees everyone with home insurance paying a levy to cover those most at risk.

Cornish Mutual, a general insurer, has around 24,000 members in the South West, and as already dealt with more than 300 claims since the floods struck.

Mr Goddard said: “The insurance industry is well set up to deal with these incidents, however there is no magic wand that will settle claims quickly. It takes time for houses to dry out, assessments to be made and claims to be dealt with properly – no amount of government intervention can change that.

“As an industry, we can cope with managing risk and dealing with claims, it is what we exist to do. Indeed, it is at these times when we can help our members most.

“I believe we have done that at Cornish Mutual in dealing sensitively and promptly with the 300 or so claims we have received since the storms began.

“However, what we can’t control is the weather, and the amount of investment that is put into flood defences and infrastructure.

“The insurance industry and the government has been in discussions for some time now on a not-for-profit scheme called Flood Re, which would ensure flood insurance remains widely affordable and available, including to those in high-risk areas.

“But there is still work to be done before the industry is satisfied that the government is prepared to play its part in protecting people against these acts of nature.”

Around £14 million has been paid out in emergency claims – typically between £500 to £3,000 – and £24 million has been paid out for emergency accommodation, according to the Association of British Insurers (ABI).

Following the meeting, Mr Rogerson said: “We were reassured that they have already put in place a range of measures to look after their customers, and we have agreed with them further steps to help the recovery process including providing a team of experts to advise on delivering the new repair and renew grants and a commitment to reviewing the cost of 24-hour flood helplines. We will continue to meet on a monthly basis to ensure an effective, coordinated response.”

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