Time is running out for homeowners with a high risk of flooding who may lose their insurance next year.
The voluntary agreement by insurers to continue to offer flood cover is due to run out in June 2013 and nothing has been lined up to replace it.
Without insurance, homeowners at
risk of flooding may find it more difficult to re mortgage and the home may become impossible to sell.
For those who own or are thinking of buying a newly-built home, homes built before January 2009 are already
exempted from the existing agreement.
The ABI is negotiating with the government to see what can be done when the deal expires.
One suggestion is a cap on the maximum premium a homeowner would pay.
If a particular home was more of a risk than the premium allows, the insurance would transfer into a central fund, where the premium would be topped-up from a levy on
ALL British property insurance.
Those at risk are already finding both excesses for flood claims and premiums are rising fast.
A typical flood claim can be as high as £40,000, with a homeowner's excess of more than £10,000 for the highest risk homes.
After a flood claim, one householder saw his premium rise from £240 before the flood to £850 two years ago.
Last year his premium doubled to £1700 and this year he was quoted £2,400.