Homeowners have faced a worrying time over insuring their homes because of the risk of flood. Now there has been a breakthrough between the Government and the insurance industry, writes Oxford East MP Andrew Smith

FIVE thousand homes and business are at risk of flooding in central Oxfordshire, plus many more across the rest of the county.

Getting affordable flood insurance is a big worry for lots of residents.

Only last Sunday, as I was calling round the Abingdon Road I met a householder who can’t get flood insurance, and I am trying to help her do so.

We are now crossing the deadline which was set for reaching a new agreement between government and the insurance industry to make sure property owners can get insurance in the future.

In a Commons debate three months ago MPs on all sides, myself included, pressed the government and the insurance industry to sort this out.

There is a very good reason for the government to play a role in supporting affordable insurance.

As I pointed out in the debate, successive governments – and local councils of all complexions – have allowed housing, industrial and commercial development to take place in and close to flood plains. Not enough attention has been given in building and development design to the impact of the quick run-off of water.

What’s more, there is nowhere in the world where a free market for flood insurance secures affordable insurance for high-risk properties without government involvement.

So it is encouraging news that last week the government and the insurance industry announced that they had reached an understanding on the way forward.

A special fund, called ‘Flood Re’, will be set up by the industry, which will pay into it £10.50 for every domestic insurance policy in the country, as well as premiums from high risk properties.

Insurance companies say this does not mean an extra burden on home insurance premiums in general, as there is already cross-subsidy from homes with a low flooding risk to those with a higher risk.

For those properties with high flood risk, premiums would be capped at a set price according to council tax band. The Association of British Insurers says that prices for this flood insurance would “start at no more than £210 per annum in Bands A and B, rising to £540 pa in Band G.”

The government’s role in this is to increase capital expenditure on flood defences, and to bail out the Flood Re fund in the event of flooding so severe that it exceeded the losses expected in a one-in-200 year flood (around six times worse than 2007).

These new arrangements need changes to the law, which will be carried through in the Water Bill which the government announced last week. There is a period of consultation up to August 8. People wanting to respond or to find out more can do so at the website https://consult.defra.gov.uk/flooding/floodinsurance, or put in views through their MP.

Until new arrangements take effect, insurance companies have undertaken to continue to make available insurance cover on the present basis, though this is not without problems.

I will pay close attention to constituents’ views, and do all I can to ensure the final proposals are workable, affordable and fair.

We need to keep up the pressure too for more flood alleviation measures.

Thanks to the excellent work of the Oxford Flood Alliance, supported by local MPs and councils, we have seen progress locally since the very bad 2007 floods on schemes like Hinksey Drain and Munday’s Bridge, with improved maintenance of water courses and emergency flood defences, but there is still more to do.

It is bad enough for local residents to worry about flooding every time there is prolonged rainfall, without them also having to worry about paying for the insurance needed to give them cover if the worst happens.