Minister denies crisis as flood insurance deal deadline nears

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The Floods Minister has been forced to deny that crunch talks with insurance firms are at “crisis point” as the deadline to reach a deal over cover for flood-risk homes approaches.

There are now less than six months to go until a long-standing agreement expires between the Government and the Association of British Insurers (ABI) which ensures people in areas of flood risk can get home insurance.

There is mounting concern amongst homeowners in areas throughout Yorkshire hit by flooding over recent years that if no deal is reached to extend the so-called “statement of principles” beyond June, they will no longer be able to insure their homes.

Speaking in the Commons, Karl Turner, the MP for Hull – which was hit by devastating floods in 2007 – said the Government was in “disarray”. “The statement of principles runs out in June 2013,” the Labour MP said. “The ABI considers the negotiations with the Government to be at crisis point, and estimates that 200,000 people will be without insurance.

“What do I say to my constituents who are asking me what they should do about insurance? This is in absolute disarray.”

It was reported late last year that talks had broken down. The Government hotly denied the claim, however, and continues to insist an announcement is imminent.

Floods Minister Richard Benyon said: “I entirely reject the idea that our talks with the ABI are at crisis point. Nothing could be more different; they are progressing at a very high tempo.

“We are negotiating with the ABI, with meetings happening on a seemingly daily basis and at the highest level in Government.”

The negotiations are being led by Oliver Letwin, the former Shadow Chancellor who is now a Minister in the Cabinet Office.

Mr Benyon said he is hopeful his team will eventually be able to secure a better deal, and even bring down expensive premiums.

“Premiums have been rising pretty dramatically while the statement of principles has been in place,” he said.

“We want to protect those on low incomes in flood-risk areas, and we think we have a method of doing that.

“We are at an advanced stage in negotiations; I will come to the House (of Commons) shortly, I hope, with details.”

Tory wades into row: Page 18.