The Risks of Flooding: A Very British Dilemma

Britain may be unique in its tradition of flood insurance which is taken out as part of a much wider coverage of risks to commercial and residential buildings, and it is usual for lenders to require that purchasers of buildings take out and maintain insurance cover to protect the value of their assets. Several issues are affecting the insurance industryís perception of the risks to flooding in England, including the government-led drive to construct 200,000 dwellings within flood-prone sites, and, with the effects of climate change promising more severe storms and increased rainfall in the UK. There is a very real probability that, in certain locations, flooding will cease to be an insurable possibility and become an uninsurable probability. This could have huge implications for the property market in the UK, as well as for the perceptions of and reliance on insurance as a normal part of the property occupiersí protection of their asset value. This paper will report on on-going research into how the need for more dwellings in areas at risk from fluvial or estuarial flooding could impact on flood insurance cover in the UK and the responses of the British government, responsible authorities and the insurance industry and discuss to what extent the property industry can help to reduce the exposure of dwellings in flood-prone areas.