Should the taxpayer fund insurance for those on flood plains?

CLAPTON

chewmylegoff wrote: »

I still don't agree though; flood insurance is not a human right. No insurance is a human right. We don't expect the govt to step in and provide car insurance for people who the insurance companies won't insure, for instance.

Besides, the industry is just scaremongering. It's not as if there haven't been floods before. As anyone with an underpinned house knows you can actually get insurance.

absurb

but even self interest would indicate that action was required

a million mortgages defaulted on (why pay if your house is now worthless) would have some small effect on the economy and in my view on the election prospects of the government of the day.

chewmylegoff

CLAPTON wrote: »

absurb

but even self interest would indicate that action was required

a million mortgages defaulted on (why pay if your house is now worthless) would have some small effect on the economy and in my view on the election prospects of the government of the day.

Frankly if the cost of spreading this across every household is £10 per household to "help" 1 million houses (which would obviously not be completely uninsurable anyway and therefore would obviously not be worthless) then the total cost of the "scheme" is £200 million. So why doesn't the insurance industry simply charge anyone on a floodplain £200 more? That's how insurance works in pretty much every other possibly conceivable instance.

The only thing that is absurd here is suggesting that everyone else should pay for the heightened risk of others which ultimately results in a tiny number of claims a year.

And it isn't self interest because I don't pay building insurance...

grizzly1911

Is £10 per policy just the tip of the iceberg?

What happens if we have 30 year of no claims. Is there some point at which this premium would stop being collected.

Is it being put into a ring fenced fund for life or is it going to be creamed off periodically to boost profits.

At the end of the day is this additional premium any different to the utility companies charging more to cover social need users or car insurance charging £40 per policy year for uninsured drivers?

I accept Claptons point that if we were left with 1 million uninsurable homes then their value would plummet crating losses for our banks once more.

One way or another we collectively are going to pay. Question is do you trust private enterprise to do it or the Government?

Linton

chewmylegoff wrote: »

The government should intervene if the insurer goes bust and cannot make good all the claims from the people it has insured. Otherwise no.

It's ludicrous to suggest that because the govt allowed houses to be built in place X it is responsible for underwriting insurance policies on those properties for ever more. By the logic the government allowed Wonga.com to have a consumer credit licence so it should pay off all of the pay day loans people have taken out.

The issue isnt whether insurance companies would go bust. They wont because if a house is so likely to flood that the fair cost of insurance is far more than people can afford the insurance companies would refuse to renew insurance on it., as is their right The result of that is that large areas of the flood plains would eventually become derelict and many thousands of families bankrupted.

I would think that many of the houses concerned aren't new builds irresponsibly built on the flood plains, rather older houses that have become a flood risk because of subsequent climate, land use, and river management changes. Consider the ancient and now high flood risk towns/cities such as York, Worcester, Evesham, Tewkesbury and even London.

So as I see it, that's the choice. Abandon the worst of the flood plains and the people who live there or subsidise the fairly frequent refurbishment of the houses.

CLAPTON

It is reasonable to expect the government to protect the people from reasonable threats.

Taxpayers built a flood barrier on the Thames to protect London from flooding.

So it is reasonable for taxpayers to protect other sections against the increasing risk of severe flooding. It most cases is it impractical for individuals to protect their own property in isolation from the wider community.

Where that protection fails, unless the property owner is negligent it is reasonable to protect them from losing their property using taxpayers money where necessary.

Insurance plays a part and the government needs to insure that insurance is available

How it does this is subject to debate.

Without knowing the full details, cost, number of properties at risk etc etc it's a little difficult to be definitive about the (range) of solutions.

markharding557

Perhaps the government could use it's foreign aid budget instead.
It appears our own people need aid.

Kennyboy66

A little ironic on a moneysaving website that people are bemoaning the fact that insurance will become punitively expensive for those in flood risk areas.

Surely this is just the natural effect of insurers being able to micro assign risk, rather than having cross subsidising 'pools' in the olden days.

How about £10 on every policy to make car insurance cheaper in central Manchester ?

CLAPTON

Kennyboy66 wrote: »

A little ironic on a moneysaving website that people are bemoaning the fact that insurance will become punitively expensive for those in flood risk areas.

Surely this is just the natural effect of insurers being able to micro assign risk, rather than having cross subsidising 'pools' in the olden days.

How about £10 on every policy to make car insurance cheaper in central Manchester ?

a bit like saying that because we pay personally for prescriptions then we should pay for heart operations.

some would see a difference.

but the irony is indeed there.

Thrugelmir

CLAPTON wrote: »

do you mean all houses have equal flood risk?

Searches give statistical possibility of flooding. So not equal. However one day..........

Generali

It's a crazy idea. If people make bad decisions they shouldn't expect everyone else to be on the hook for that.