Flood debate raises insurance concerns

MPs from all three main parties took the opportunity to air their concerns about insurers taking advantage of policyholders who are effectively trapped into dealing with a single insurer. While they acknowledged that insurance companies had agreed to continue insuring anyone in a flood-risk area who they already had on their books, they pointed out that this frequently left people with nowhere else to go. With many examples to hand of excesses rising above £10,000, the MPs argued that this was almost leaving people uninsured.

There weren't, however, any calls for action to be taken against the insurance industry to force them to offer cover at uneconomic rates and it seems unlikely that any amendments will be put to the bill during its committee stage to take us down this road. What we might see is the Department for the Environment, Food and Rural Affairs (DEFRA), looking at the suggestion from Labour MP Ian McCartney that the solution might be a collective insurance scheme administered through the water rates, rather like the insurance-with-rent schemes for council tenants.

The bill itself was given an unopposed second reading with almost every speaker, despite a few reservations, wanting to see it reach the statute books as quickly as possible.