UK ministers are at loggerheads with the insurance industry over flooding, after 200,000 people in high-flood-risk areas were warned they could lose their home cover.
As the flooding spread to more towns in the UK, ministers traded accusations with insurers about the possibility that many homes in areas of flood risk could become uninsurable from next year.
After major flooding in 2000, the government and the Association of British Insurers (ABI) agreed a "statement of principles", insuring people in risk areas with insurance would still be offered it.
This expires in 2013 and the ABI has proposed a fund based on an annual levy of £8 on all of the UK's insured properties to replace it. This would enable premiums of high-flood-risk homes to stay affordable. Otherwise, they would rise so high as to be uninsurable.
Yet the ABI has asked the government for an "overdraft" in case severe flooding swallowed the fund. It would be paid back in a year, the insurers said, but ministers refused to countenance it, insisting it was "completely determined" to come up with an affordable scheme that did not burden taxpayers. (© Independent News Service) Michael McCarthy