Cheltenham's flood-devastated leisure centre reopened earlier this month - 14 months after the plant room collapsed under six metres of water during last summer's floods in Gloucestershire.
The centre's repairs was, at £5m, the most expensive individual insurance claim resulting from the floods, which hit the south-west of England and Yorkshire. Insurers paid out £3bn; uninsured householders - many living in social housing - lost millions more.
The Cheltenham centre had a gala reopening, but many in the 130,000 properties hit by the floods are still return to fully functioning homes.
The floods in the north and the southwest of England added up to the biggest UK catastrophe the insurance industry ever had to deal with. Besides the damages bill, insurers had to handle an unprecedented number of individual claims. This month's floods are expected to cost the industry tens of millions of pounds.
Insurers have to decide how to deal with future flooding threats in terms of pricing and deciding if cover will remain a feature of most home insurance. Last year's disaster was labelled a "once in 150 years event", but none are betting that the next serious flood will not be until 2157.
Mixed experience
The Pitt report on the floods points to a mixed experience of insurance. It quotes one householder in Barnsley, South Yorkshire, as saying "my insurance was absolutely fantastic - all my work is finished and I have been paid out for everything", while a neighbour complained of zero action four months after the flood.
In Hull, East Yorkshire, the story is equally mixed. "Some have had excellent service from insurance companies, while people living next door are still fighting for compensation - in some cases over petty amounts, such as the loss adjustor who told one man he could have the £15-a-day eating allowance for those without a kitchen while his wife would have to make do with £10, as she was very petite," says Dave Dixon at Hull Citizens Advice.
Unlike continental Europe and North America, flood insurance is a standard feature of UK policies. Insurers say they want to keep it that way, but that does not mean policyholders in risk areas won't find insurance more difficult or expensive.
"Some companies won't quote for Hull postcodes - at least for new business," says Dixon. "And some of those that will insist on huge excesses for future flood damage, which means that some start worrying every time there is heavy rain. People simply can't afford to pick up the first £1,000, £2,000 or £5,000 of a claim. To some, that says don't bother with insurance, which is not our view but you can understand, but it's mixed - one Hull resident whose claim topped £30,000 has had her insurance renewed with nothing changed except for £12-a-year extra."
At the British Insurance Brokers Association (Biba), technical services manager Steve Foulsham believes insurance may become unaffordable. "The Association of British Insurers' (ABI) statement of principles on flood cover talks of offering policies to the 'vast majority', but that does not mean it will be necessarily affordable," he says. "Some properties will effectively be excluded - these will include those where the flood risk is rated at more than once in 75 years. Premiums have not gone up much, but flood excesses have risen."
David Williams, claims director at Axa, says insurance is meant to spread risk not pay for inevitable damage. "With premises that suffer multiple claims we will use rating increases and excesses as have already been seen in use, as well as work with policyholders to help them mitigate risks," he says. Foulsham worries about the 40% in some affected areas who had no insurance for their belongings.
"Most of these were council or housing association tenants who either did not realise their contents were not covered or who rejected insurance due to the cost or the perceived hassle of getting cover. Biba believes that the Pitt report recommendations that those with social housing contracts should have insurance premiums included in rents are sensible," he adds.
Insurers are calling for less development in risk areas. "River and drainage authorities have to ensure their responsibilities are carried out. And developers in risk areas could do more such as moving boilers upstairs and putting electrical sockets at shoulder height," says Anna Fleming, the property claims director at Zurich Insurance, which paid out for the Cheltenham centre. "Our fear is credit-crunched government and developers will find flood mitigation spending easy to put off - they can always hope it won't happen again, but insurers have to make a profit. We won't take unlimited risks in flood-prone zones."
The ABI says members are committed to ensuring that cover remains available. "Reducing the flood risk will ensure that flood insurance remains widely available and competitively priced to the millions of property owners in the UK who are living with the flood threat," says a spokesman.
Subject to government investment in line with the ABI statement of principles and customers reducing their individual risks "we would not see flood cover being withdrawn completely from home insurance," says Williams.
