In June we reported that the Association of British Insurers (ABI) had agreed to extend the current arrangements for ensuring properties vulnerable to flooding have adequate insurance on reasonable terms until the end of July, to allow talks with the Government to continue.
Last week the ABI announced that it has reached an agreement in principle with the Government to develop a not-for-profit flood fund, known as Flood Re, to ensure that flood insurance remains affordable and available to homeowners at high flood risk and have put in place a framework agreement on which to proceed.
It appears that the scheme will only cover homeowners, and not small business premises, but we will not know for certain until further details of the scheme are published.
The new scheme is expected to be implemented in the summer of 2015. Until then the ABI will continue to honour the commitments given in the old Statement of Principles.
For further information please see The Future of Flood Insurance: What you need to know about Flood Re.