Association of British Insurers - Statement of Principles on the provision of flooding insurance
The Scottish Executive is committed to managing flood risk and welcomes the revised arrangements agreed between the Government and the ABI (Association of British Insurers) which reflects the continued partnership with the insurance industry to ensure that affordable insurance remains widely available. ABI members have renewed their commitment to make flood insurance available where the flood risk is adequately managed. They will also cover existing customers where flood defences will be completed within five years. The revised statement of principles came into effect on 1 January 2006 and updated a previous agreement introduced in 2003.
Flood cover will continue to be offered as a standard feature of household and small business policies where properties are protected by flood defences to a standard of 1.3% annual probability (1 in 75 year chance). Premiums will reflect the degree of risk.
Insurers will continue to offer flood insurance to existing customers whose properties are currently at significant risk but where improvements in flood defences bringing them up to the 1.3% annual probability standard (1 in 75 year chance) will be completed within five years. (This commitment previously ended in 2007).
Insurers will work with existing customers on a case-by-case basis in those areas of significant flood risk where there are no plans to reduce the risk, and look at ways that flood cover can be continued.