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08:00 - 29 August 2007

Alan Johnson has called for an urgent meeting with the director general of the Association of British Insurers (ABI) after it emerged thousands of East Yorkshire homes have been blacklisted by insurance companies.

The Hull West and Hessle MP said he would work together with fellow Hull MPs John Prescott and Diana Johnson to secure a meeting with Stephen Haddrill over the issue.

He said he wants to ensure the insurance industry takes a "measured, proportionate response" to the floods and "doesn't use this as an excuse to hike up their premiums."

The Mail reveals today how all residents whose homes were flooded and not insured are being refused cover. Those whose homes were flooded and insured are facing huge hikes in premiums.

Even those who were not hit by the floods are being forced to pay more to cover their homes if they are deemed to live in a "high risk" area.

Following the floods on June 25, Mr Johnson wrote to Mr Haddrill after hearing from constituents some insurance companies had placed an embargo on new policies.

In response, Mr Hadrill told Mr Johnson members of his association were committed to providing flood insurance to "as many customers as possible".

Mr Haddrill wrote: "In the ABI Statement of Principles on the provision of flood insurance, we set out the intention of members that flood insurance for domestic properties and small business should continue to be available for as many customers as possible.

"The premiums charged and other terms - such as excesses - will reflect the risk of flooding, but will be offered at competitive market prices."

Mr Haddrill admitted some insurers did introduce a "temporary embargo" on new business in some of the worst affected postcodes.

"They did this because they were concerned people were seeking cover after they had been flooded - in other words with a view to making a retrospective claim," he said.

"All our members are reporting normal underwriting has been resumed and they remain committed to the Statement of Principles."

Mr Johnson told the Mail: "I wrote to Stephen Haddrill on July 4, the week after the floods, because I had been up to Hull at the weekend and constituents had told me there would be an embargo on anyone getting flood insurance in Hull.

"So I wrote to the ABI on the issue of people being embargoed and received this very reassuring response that people would be able to get cover. There was no indication of it being regardless of whether they were insured previously."

Mr Johnson acknowledged he had been told premiums would reflect the likelihood of flood damage, but he said the region was no more likely to flood than it was a year ago.

"In fact, the action taking place in response to the floods means it is probably less likely these things will happen again, although you have to accept you can never say never," he added.

In response to claims by the ABI that residents should lobby Government for greater spending on flood defence, Mr Johnson highlighted the recently released interim report into the cause of the floods in Hull by an independent body, which revealed it was largely a drainage issue.

He said: "Flood defences in Hull and the East Riding are fine. They worked perfectly. There were no overflowing rivers here. This was a problem about the amount of rain that fell not being drained away quickly enough."

Hull North MP Diana Johnson said: "Despite their earlier assurances, insurance companies seem to be behaving as if 75 per cent of Hull homes were flooded, rather than the five per cent that were.

"These insurance companies are not treating Hull residents fairly and are exploiting the floods as an excuse to increase premiums."

Beverley and Holderness MP Graham Stuart also condemned the insurance companies, adding: "The ABI's previous indication families would still be able to get insurance has left people feeling betrayed. Either that promise should not have been made, or it should be honoured by the industry."

East Yorkshire MP Greg Knight said: "This is quite a complex issue, although I deplore the fact insurance companies are refusing some people cover."

Hull East MP John Prescott declined to comment.


Association of British Insurers