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| Version 2 | Version 3 |
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| Insurers extend deal for flood-hit homeowners by a month | Insurers extend deal for flood-hit homeowners by a month |
| (4 months later) | |
| Flood-hit householders will continue to be able to buy insurance for a month after an agreement between insurers and the government ends in June, but it is still unclear when a deal will be reached to ensure cover remains affordable for at least 200,000 affected properties. | Flood-hit householders will continue to be able to buy insurance for a month after an agreement between insurers and the government ends in June, but it is still unclear when a deal will be reached to ensure cover remains affordable for at least 200,000 affected properties. |
| The Association of British Insurers (ABI) said its members would voluntarily continue to offer flood insurance to homeowners until 31 July, beyond the end of an existing arrangement with the government. | The Association of British Insurers (ABI) said its members would voluntarily continue to offer flood insurance to homeowners until 31 July, beyond the end of an existing arrangement with the government. |
| That agreement, known as the "statement of principles", obliges insurers to offer flood insurance as part of standard household policies at reasonable rates, providing the government invests in flood defences. | That agreement, known as the "statement of principles", obliges insurers to offer flood insurance as part of standard household policies at reasonable rates, providing the government invests in flood defences. |
| It applies to existing customers, and allows them to renew policies with their current insurer. It does not, however, cap charges or cover anyone who moves to a new home in a flood-hit area. | It applies to existing customers, and allows them to renew policies with their current insurer. It does not, however, cap charges or cover anyone who moves to a new home in a flood-hit area. |
| So far ministers and the industry have been unable to decide what happens next. | So far ministers and the industry have been unable to decide what happens next. |
| The insurance industry wants to introduce a levy on insurance for all policy holders of about £8 in order to create a £150m-a-year fund to cover those at high risk of flooding. But the government is understood to be reluctant to provide any additional funding that could be required on top of this in the case of extreme flooding. | The insurance industry wants to introduce a levy on insurance for all policy holders of about £8 in order to create a £150m-a-year fund to cover those at high risk of flooding. But the government is understood to be reluctant to provide any additional funding that could be required on top of this in the case of extreme flooding. |
| Without a deal in place, customers would return to a free market, meaning insurers could decide whether or not to offer cover and, if they did, could charge what they like. The ABI said this could leave 200,000 households struggling to afford policies. | Without a deal in place, customers would return to a free market, meaning insurers could decide whether or not to offer cover and, if they did, could charge what they like. The ABI said this could leave 200,000 households struggling to afford policies. |
| In a letter to the environment secretary, the director general of the ABI, Otto Thoresen, said there were "still important issues to resolve". | In a letter to the environment secretary, the director general of the ABI, Otto Thoresen, said there were "still important issues to resolve". |
| However, the letter goes on to suggest that the extension will give adequate time to address the remaining issues. | However, the letter goes on to suggest that the extension will give adequate time to address the remaining issues. |
| The environment secretary, Owen Paterson, said negotiations were "at an advanced stage". | The environment secretary, Owen Paterson, said negotiations were "at an advanced stage". |
| "It's good that the ABI is standing by the statement of principles and we hope to resolve the remaining issues soon," he said. | "It's good that the ABI is standing by the statement of principles and we hope to resolve the remaining issues soon," he said. |
| "Both the government and the industry are working hard on an agreement to secure affordable insurance for people at risk of flooding." | "Both the government and the industry are working hard on an agreement to secure affordable insurance for people at risk of flooding." |
| The looming deadline has led to concern among householders who have previously been affected by flooding. The National Flood Forum (NFF) charity recently said the number of calls to its helpline had trebled in the past year, and that some callers had reported premiums doubling to £2,000 a year. | The looming deadline has led to concern among householders who have previously been affected by flooding. The National Flood Forum (NFF) charity recently said the number of calls to its helpline had trebled in the past year, and that some callers had reported premiums doubling to £2,000 a year. |
| Mary Creagh, Labour's shadow environment secretary, called for ministers to agree a deal soon: "Flood-hit communities are being hit now with higher insurance premiums and excesses because weak and incompetent ministers have failed to get a new deal. | Mary Creagh, Labour's shadow environment secretary, called for ministers to agree a deal soon: "Flood-hit communities are being hit now with higher insurance premiums and excesses because weak and incompetent ministers have failed to get a new deal. |
| "The government needs to get a grip on flood insurance, get a deal and ensure that people in the 200,000 high-risk properties are able to insure their homes." | "The government needs to get a grip on flood insurance, get a deal and ensure that people in the 200,000 high-risk properties are able to insure their homes." |
| Paul Cobbing, head of the NFF, said it was disappointing that a deal had still to be reached and that the extension was "the first signal that we have had since last July that the government and ABI are in detailed discussion". | Paul Cobbing, head of the NFF, said it was disappointing that a deal had still to be reached and that the extension was "the first signal that we have had since last July that the government and ABI are in detailed discussion". |
| Any solution other than opening insurance to the free market would require legislation – something that is increasingly unlikely to go through before parliament's summer recess. Cobbing said that even if a deal was reached before July, he would expect either a further extension over the summer, or transitional arrangements to be put in place.The Royal Institution of Chartered Surveyors (Rics) warned that if a deal was not reached soon, some homes could become unsellable. | Any solution other than opening insurance to the free market would require legislation – something that is increasingly unlikely to go through before parliament's summer recess. Cobbing said that even if a deal was reached before July, he would expect either a further extension over the summer, or transitional arrangements to be put in place.The Royal Institution of Chartered Surveyors (Rics) warned that if a deal was not reached soon, some homes could become unsellable. |
| Its associate director for the built environment, Alan Cripps, said the implications of the statement of principles ending were "simply staggering". | Its associate director for the built environment, Alan Cripps, said the implications of the statement of principles ending were "simply staggering". |
| He added: "This has much wider ramifications for all property owners. Surveyors are responsible for the valuations that underpin insurance agreements; without that insurance it will be nigh on impossible to get a mortgage; without a mortgage many people will be unable to purchase property; and if properties are not insurable or mortgageable there will be a dramatic impact on their value. | He added: "This has much wider ramifications for all property owners. Surveyors are responsible for the valuations that underpin insurance agreements; without that insurance it will be nigh on impossible to get a mortgage; without a mortgage many people will be unable to purchase property; and if properties are not insurable or mortgageable there will be a dramatic impact on their value. |
| "This has the potential to rule out existing residential stock at a time when we're desperately trying to close a housing deficit." | "This has the potential to rule out existing residential stock at a time when we're desperately trying to close a housing deficit." |