It has been all over the news in the past few months – 2012 was the second wettest year in Britain since records began, and the consequences have been all too apparent. Flooding has occurred throughout the UK, causing damage to many cars and homes, leading to many people having to claim on their insurance. Currently, car insurance providers offer universal flood insurance at reasonable rates even to those that live in flood-affected areas, as long as the government invests in flood defences.
However, this deal that has been going on for ten years between insurance companies and the government is set to expire, and talks concerning a renewal are not going well. Even though the talk has been going on for months the government has yet to make a decision, which is proving frustrating to insurance providers who are concerned that up to two hundred thousand households will not be able to afford flood insurance should the deal not go ahead. Chief Executive of the RSA Insurance Group, Simon Lee has said: “We’ve proposed a solution to the Government and I think they’re being a little tardy in responding to that solution. We thought we were making progress but are slightly concerned it has slowed down.”
Mr Lee has also criticised new regulations that will affect car insurance prices, especially the new EU ruling that car insurance providers are no longer allowed to base quotes on gender. “It’s bonkers, it’s barmy,” he said “The whole basis of our insurance is charging the right price for the right risk. This directive has forced us to rework all our algorithms. It has cost us money and there’s also an opportunity cost involved. It’s one of those things that’s very easy to talk about but quite hard to do. It will be interesting to see how it plays out.”
It is important in 2013 for members of the British public to check their car insurance policies, especially as new changes in legislation could increase the price of their policies once it is time for them to renew.