MP urges flood insurance cost study

09/11/11

By Chris Gibbings

Flood-risk area homeowners' claims that their premiums have increased by as much as 500 per cent have led to a Hull MP to demand a review of the cost of insurance.

Some flood risk homes were even refused cover, Hull North Labour MP Diana Johnson told the BBC, adding that insurance firms should provide affordable policies.

Damage caused by the floods of summer 2007 cost the insurance industry £3bn, said the Association of British Insurers (ABI).

Ms Johnson said people on Bransholme told her they received insurance quotes of more than £1,000 for properties: excesses rose to around £3,000 and £6,000 in one case.

"People feel really angry," she said, adding that a lot evidence indicated Hull's insurance market was "not being open".

However, ABI's Matt Cullen said insurers had to ensure they did not make a big loss on their entire portfolio of flood risk. He said when risk gets high insurers have to take care.