Flood Coverage in U.K. May Suffer Due to Budget Cuts

April 23, 2004

Thousands of homes in the U.K. could lose their flood insurance if the government enacts budget cuts in the area of flood prevention, the Association of British Insurers has warned.

The Financial Times reported that insurers are threatening to withdraw coverage from areas with an “unacceptably high” risk of flooding if the government cuts back its spending on flood prevention.

The association wants flood defense spending to be sustained in real terms to the end of the decade.

The ABI outlined its case in a submission to the Treasury ahead of this summer’s spending review. It fears spending on flood prevention could shrink along with many other departmental budgets.

Insurers are afraid flood protection might move down the political agenda after a relatively uneventful year for flooding. Flood prevention spending in the U.K. has reportedly risen in the past after seasons of severe flooding only to be cut back when short-term savings were needed.