Flood insurance in the UK: a critical perspective

Abstract

In the United Kingdom, flood insurance is an important part of our portfolio of flood risk management measures, although it can encourage people to continue to occupy risky areas. Also, the main beneficiaries from investment by the government in flood risk reduction are insurance company shareholders, given that premiums are generally not reduced when flood risk management measures are introduced. The introduction of Flood Re in the United Kingdom looks extremely problematic: it is economically inefficient, and does nothing to encourage property owners themselves to take self‐help flood mitigation measures. But in the international context, we recognize that flood insurance in United Kingdom is relatively unique, and has considerable merits as well as demerits. It can be flexible if risk levels change, and does not place an undue burden on the public purse. However the arrangements remain opaque, and continue to have the unfortunate focus of simply being a damage compensation mechanism, rather than a vehicle to promote behavioral change in the interests of sustainable flood risk management. WIREs Water 2015, 2:601–608. doi: 10.1002/wat2.1104This article is categorized under: Human Water > Water Governance