Flood insurance risk fears are downplayed

FEARS that Skegness homeowners could be unable to insure their properties due to significant flood risks have been allayed by insurers and the Environment Agency.

A report published by the Association of British Insurers last month indicated that more homes in the constituency of Skegness and Boston faced a significant flood risk than anywhere else in the UK.

An estimated 7,550 homes were said to face a greater than one in 75 chance of flooding every year, which the report claimed could make them too expensive to insure unless an agreement between insurers and the government, due to expire in 2013, was renewed.

Skegness residents and businesses were gravely concerned by the report which they felt could transform Skegness into a ‘ghost town’.

Speaking at the latest Skegness and District Chamber of Commerce meeting last Monday, Butlins resort director Chris Baron said: “The insurance problems are just the tip of the iceberg - if rates are too high then no one will be able to get mortgages and no one will move here - it will be a ghost town.”

However more precise flood risk data collated by the Environment Agency indicates that the dangers facing Skegness are far less severe.

Whereas Boston faces a flood risk of between one in 50 and one in 150, the risk affecting Skegness is just one in 200 due to protection offered by the Lincshore Scheme.

The ABI’s constituency based report had aggregated the flood risk in both towns, which resulted in Skegness’s flood risk being exaggerated by its proximity to Boston.

A spokesperson for the ABI explained that the report was based on parliamentary constituencies to highlight to MPs the potential difficulty of insuring flood risk affected homes if the government did not renew its agreement with the industry in 2013, rather than as a model for insurance companies to follow in individual cases.

When insurance companies consider insuring a Skegness home against flooding, it will base its premium on more precise localised data, rather than the constituency based report.

Defra has offered further hope for homeowners, even in the highest flood risk areas, through its commitment to provide support to those in need after the current government agreement ends in 2013.

“We want flood insurance to remain widely available and are continuing to work with the insurance industry to ensure that this will be the case after the current agreement between the government and insurers expires in 2013,” Defra said.