Flood Insurance In The UK – A Survey Of The
Experience Of Floodplain Residents
Author(s)
J. E. Lamond & D. G. Proverbs
Abstract
Flood insurance, or the lack of it, is one of the factors that determine whether
building on floodplains is sustainable. Availability of insurance can provide
flood victims with the financial security to restore, maintain and sell their
property but can also induce moral hazard increasing the eventual cost of
flooding to the wider community. Flood cover in the UK has come under the
spotlight in recent years following an increase in the frequency of flood events.
The long-term gentlemen’s agreement between Government and the private
insurance industry has been revised in the light of these events leaving many
property owners in an ambiguous position as regards home insurance. The
results of a survey of residents in and outside the floodplain reveal that despite
recent changes in the policies of insurers they are in general providing insurance
at reasonable rates to flood victims and to homeowners at risk of flood. However
floodplain residents are experiencing a variety of difficulties in achieving cover
and are pursuing a wider range of strategies to obtain cover. A minority of
residents find their insurance compromised. The research concludes that the
diverse and competitive market for insurance in the UK fulfils the short term
need of the floodplain resident for cover but may not serve their best interests in
the longer term.
Keywords: competition, finance, flood, insurance, moral hazard, risk.
1 Introduction
The management of buildings on the floodplain in a developed economy is a
delicate balance between the needs of the floodplain residents and the wider
population. Historic settlement patterns have placed a large part of the world
Keywords
competition, finance, flood, insurance, moral hazard, risk.
Related Book
Other papers in this volume
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