Abstract
Flood risk insurance can be an effective tool in assisting the restoration of damaged property after a flood event and sustaining communities through difficult times. It can also form part of a wider flood risk management strategy. In the light of recent flood events in the UK and in the context of changing property insurance markets, the universal cover previously enjoyed by floodplain residents has been called into question. Conflicting media and industry views leave the floodplain resident and the wider community in confusion. A survey of floodplain residents in England regarding their experience with flooding and flood insurance in England has been undertaken. The results reveal that some floodplain residents do indeed encounter difficulties when seeking insurance for their homes. However, despite the risk‐averse policies of some insurers, availability of insurance is still strong in both at‐risk and previously flooded locations. Success in gaining insurance may lead to complacency among residents who see no advantage in pursuing other, more costly, damage mitigation actions. As a tool in risk management, therefore, the market is prevented from realising its potential by competition, which results in a lack of a consistent approach, rewards homeowners' search strategies and reduces information flow.
Highlights
Victims of flooding experience a frightening and stressful chain of events which can leave effects many years after the waters recede (Gruntfest, 1995, Hajat et al, 2003, EA/DEFRA, 2005)
Contrasting views are presented by the media, with much attention on the difficulties experienced by homeowners seeking cover (Downes, 2005, Dey, 2006, Stevenson, 2002, Jones, 2003), and the Association of British Insurers (ABI) who state that there is a reasonable market for flood insurance available (ABI, 2005d, ABI, 2005c)
Shrewsbury has a long history of flooding, and is one of the most frequently flooded places in the UK, with properties in all flood risk categories
Summary
Victims of flooding experience a frightening and stressful chain of events which can leave effects many years after the waters recede (Gruntfest, 1995, Hajat et al, 2003, EA/DEFRA, 2005). Authors have argued that, if this danger is recognized, it may be possible for insurers to take steps to prevent complacency amongst property stakeholders (Huber, 2004, Green and Penning-Rowsell, 2004). There is no state provision for flood reinstatement and, as part of an agreement between the Association of British Insurers (ABI) and the UK Government, flood cover is included as standard in domestic property insurance contracts (Huber, 2004, Crichton, 2005). In the light of the high costs of recent flooding events and the generally accepted view that flood events in the UK are becoming more frequent and are likely to continue to do so (Dlugolecki, 2004, Environment Agency, 2004, ABI, 2005b) insurers are becoming less willing to cover properties at risk of flooding (Green and Penning-Rowsell, 2004, Crichton, 2005). Contrasting views are presented by the media, with much attention on the difficulties experienced by homeowners seeking cover (Downes, 2005, Dey, 2006, Stevenson, 2002, Jones, 2003), and the Association of British Insurers (ABI) who state that there is a reasonable market for flood insurance available (ABI, 2005d, ABI, 2005c)
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