Campaginers in a flood-hit town have been hailed for playing a key role in creating a new national agreement on flood insurance which could help millions of people.
Members of a working group set up in Morpeth – after 1,000 homes and businesses were flooded there in 2008 – say they have made a “significant contribution” to the proposed new deal on cover for flood-risk households.
The group, which includes the Morpeth Flood Action Group (MFAG), the town council and chamber of trade, was set up in 2010 amid fears that homeowners in under-threat communities such as Morpeth could be priced out of flood insurance because of soaring premiums.
It came up with a model which involved the creation of a national fund – paid for through a levy on household insurance premiums – to make sure that flood insurance continues to be available to all.
The Morpeth idea was taken up by the National Flood Forum (NFF), and has now been largely adopted in a new draft agreement between the Government and the Association of British Insurers (ABI).
Defra announced this week that a deal has been agreed with insurers, although more work needs to be done on the detail and it is not expected to come into force until 2015.
The announcement came after ministers had been locked in negotiations with the ABI for months over a replacement for the current agreement on flood insurance, which runs out at the end of next month.
The proposed new deal will cap flood insurance premiums, linking them to household council tax bands, so that people will know the maximum amount they have to pay.
A levy paid by insurance companies into a central fund will be used to ensure that affordable cover is available for high risk homes, and help pay claims for people who are flooded.
The levy on all household insurance premiums is proposed at £10.50.
Both the levy idea, and the proposal to link premiums to council tax bands, came from the Morpeth working group.
Figures from the Environment Agency show more than five million people in England and Wales live and work in properties that are at risk of flooding from rivers or the sea.
Yesterday flood action group chairman Alan Bell was congratulated by NFF chairman Charles Tucker on the work done by Morpeth campaigners on the issue.
Mr Bell will also take part in a Defra summit in London next month to discuss ways of taking the new insurance deal forward.
He said: “I think it is fair to say that about 80% of the model we devised has been included in the new draft agreement.
“We have had various discussions with the ABI about our model and they have taken it on board. I’m very pleased that this is now moving forward, but there is still a lot of work to be done.”
Town councillor David Parker, who was also a member of the working group, said: “I think we have made a significant contribution, and can claim quite a bit of credit for this new agreement, along with other organisations.
“This is wonderful news for householders across the country, including Morpeth, who have been fearful that they would be faced with no insurance, or insurance at prohibitive prices.”
Environment Secretary Owen Paterson said: “We have worked extremely hard with the industry to reach an agreement on the future of flood insurance.
“There are still areas to work through but this announcement means that people no longer need to live in fear of being uninsurable, and that those at most risk can get protection now and in the future.”
Otto Thoresen, the ABI’s director general, added: “Insurers’ priority has always been to ensure that flood insurance remains affordable and available for everyone who needs it.”
He said reaching this stage had required compromise on both sides, and establishing the new system would take an “unprecedented level of partnership” between the Government and the insurance industry.