UP TO 100,000 homeowners living under the threat of flooding could benefit from future insurance cover after a new agreement by insurers was announced yesterday.

Companies have agreed to continue offering cover to existing customers whose homes are at a significant risk from flooding – if defences to protect their houses from future deluges are completed within the next five years.

The Association of British Insurers said yesterday's announcement meant up to 100,000 households which previously may have struggled to get cover would now be able to do so.

Jeremy Walker, chairman of Yorkshire Regional Flood Defence Committee, was the chief executive of North Yorkshire County Council when floods hit the region in autumn 2000.

Since 2000, the Environment Agency has spent an estimated £257m on flood defence schemes in Yorkshire and the North-East, including a £14m scheme in Selby and Barlby.

"This agreement is a significant milestone with the potential to help thousands of homes and businesses in Yorkshire. It recognises the big increase in investment in flood defences since 2000, and this is likely to continue. However, insurance cannot remove the risk of flooding so it is important for people to know if they are at risk."

The ABI said that of the estimated two million properties in the UK considered to be at risk from flooding only a handful would now not be able to get insurance.

The ABI said even in areas where there was a high risk of flooding and no new defences were planned, insurers would work with people on a case-by-case basis to see if they could offer cover – for example, if homeowners took steps to make their homes more flood-proof. The revised statement of principles will come into effect on January 1, 2006, and replaces the existing agreement introduced at the start of 2003.

Stephen Haddrill, the ABI's director general, said: "The insurance industry is committed to ensuring that flood insurance remains available to existing customers where flood defences will be in place within five years.

"The Government's commitment to effective management of flood risk is very welcome, and enables our members to continue flood cover for almost all households and businesses at risk of flooding."

The Yorkshire Post revealed last month millions of homeowners face an increased threat of flooding because houses are being built in high-risk areas – against expert advice which warns of a disaster in the making.

Five years after the floods which devastated the region, a quarter of planned developments in flood risk areas opposed by the Environment Agency are still being built.

But yesterday, Environment and Climate Change Minister Elliot Morley said: "Action taken under the Government's flood management programme has supported the operation of a successful ABI statement of principles since 2003.

"Today's revised statement represents a combined commitment from the Government and from the insurance industry to maintain and improve protection for people and their property from the impacts of flooding."

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