Accessibility of flood risk insurance in the UK: confusion, competition and complacency

TLDR

Flood risk insurance is a key tool for property restoration and broader flood risk management, but recent events and conflicting industry views have created confusion and questioned its universal coverage for floodplain residents. A survey of floodplain residents in England was conducted to assess their experiences with flooding and flood insurance. The survey shows that although insurance is generally available, residents still face difficulties, and successful coverage can breed complacency, with market competition and inconsistent approaches limiting the effectiveness of flood risk management.

Abstract

Flood risk insurance can be an effective tool in assisting the restoration of damaged property after a flood event and sustaining communities through difficult times. It can also form part of a wider flood risk management strategy. In the light of recent flood events in the UK and in the context of changing property insurance markets, the universal cover previously enjoyed by floodplain residents has been called into question. Conflicting media and industry views leave the floodplain resident and the wider community in confusion. A survey of floodplain residents in England regarding their experience with flooding and flood insurance in England has been undertaken. The results reveal that some floodplain residents do indeed encounter difficulties when seeking insurance for their homes. However, despite the risk‐averse policies of some insurers, availability of insurance is still strong in both at‐risk and previously flooded locations. Success in gaining insurance may lead to complacency among residents who see no advantage in pursuing other, more costly, damage mitigation actions. As a tool in risk management, therefore, the market is prevented from realising its potential by competition, which results in a lack of a consistent approach, rewards homeowners' search strategies and reduces information flow.