Should those who are careful fund the reckless?

[youngmafbog]

It appears household insurance will rise and this will be partly because everyone will be expected to cover those who live in flood hit areas.

But why should those who choose to live in higher ground (and perhaps not so scenic) have to underwrite those who throw caution to the wind and live on a flood plain, usually so they get a nice view etc?

http://news.sky.com/s...its-good-and-bad-news

[Gromit]

Isn't that how insurance works?

People get burgled, but I still have to pay if I don't get burgled.

[jake-the-peg]

Why should those of us who live in little villages with very low crime rates subsidise those who recklessly choose the convenience of living in cities?

Well because we pay lower premiums

Similarly those who live on flood plains find huge excesses applied to their policies or exemptions to claims for flood damage.

As Gromit says - that's how insurance works!

[jackthehat]

Water run-off can also flash-flood houses on higher ground.
Often there is little 'choice' involved when it comes to buying property a 'safe' height above ODN.

[New Judge]

Yes, Gromit is quite correct. The principle of insurance is that the misfortunes of the few are paid for by the contributions (premiums) of the fortunate many. Of course it is not quite that simple and insurers adjust premiums according to risk (where they are not prevented from doing so by "equality" legislation). This means that those posing a higher risk pay more than those in lower risk categories. But those of lower risk will almost certainly have their premiums used to pay for claims made by higher risk policyholders.

Where some insurers do not do themselves (and their customers) any favours is when they assess risk inappropriately. This often entails premiums based on postcodes. This is often inappropriate because postcodes were not designed to lump together people posing the same risk to insurers. So we see the situation as was highlighted last week where a customer in Bridgnorth, Shropshire is unfairly treated. Bridgnorth is in the Severn Valley and property locations vary from being on the riverbank to being two or three hundred feet above the river (the town has a funicular railway joing the two levels of the town). But because there is only one postcode for the town most insurers charge the same premium for all the residents.

[chaptazbru]

I hope mine doesn't go up any more, I already pay higher because I live round the corner from the River Mersey !

[pdq1]

They have come to realise that if only those who live on flood plains paid for being there the insurance would be so high nobody could afford to take it out. The chances are the odds of being flooded must be near to 80% what with global warming going on and all this freak weather.

[LazyGun]

Well thats the principle of insurance, surely.

As for housing at threat of flooding, the policy of allowing as much building on flood plains has come around to bite the planners and the unfortunate house owners, on the ass.

Regardless of your opinion on AGW, the changes in global climate means we seem to be looking at a period of more extreme weather conditions, especially rain/flooding.

[rosehipseed]

I live on the shoulder of a hill, and my view is much better than that in the flood plain below. Houses in this town are in big demand from outsiders. On the lower ground, they are closer to shops, and schools, and major roads etc. Houses there are attractive, and they must be safe, because only an idiot would give planning permission to build on land prone to flooding, surely? Incomprehensibly, flooding is "not a planning issue", nor are overloaded waste water or sewage facilities. If the water utility, or Environment Agency fail to raise any issues at the outline planning stage, they carry no liability (The Thames Water v Bromley judgment may alter this, it's a bit early to say.)
The simple fact is that the odd freak event (like an underground stream bursting through the side of a hill) would barely affect the premiums. It's the building of large estates on flood plains that cause the problem. That is happening because the builders love the nice flat land to build on, and planning law is daft enough to allow it.