The Morpeth Flood Action Group has signalled that households could face a double whammy of soaring insurance premiums and excesses of up to £20,000, while some could be left with no cover altogether.

And Chairman Alan Bell has warned that it is not only flood victims who will suffer.

"It was to be expected that the insurance industry would react to the flood by increasing premiums and excesses for those houses and businesses which were flooded. However, the problem is more widespread as we know that properties not affected by the flood are also suffering higher premiums and excesses," he said.

"The insurance companies are assessing future risks on a postcode basis.

"High excesses mean that in the event of another flood the owners of large numbers of properties in the town will not have the money to pay the excess on their policies and their properties will not be fully repaired.

"Recovery from a second flood will be much more limited and Morpeth will become blighted, affecting everyone in the town and reducing property prices throughout the postcode district, including those not flooded in 2008."

The fears have been raised as a questionnaire is distributed throughout the town to try to establish a clear picture of the insurance situation.
Rumours of rocketing quotes for cover are rife, but as yet the Action Group has only anecdotal accounts and is seeking to shore up the concerns with hard evidence.

The data could then be used to lobby MPs and the Association of British Insurers (ABI).

"It is vital that we collect as much evidence as possible. The questionnaire is very important," said Mr Bell.

"The questionnaires will be distributed widely during the next two weeks, including through our website, and I would urge all residents and business owners to respond.

"The information supplied will be treated in the strictest confidence and will not be disclosed to any other party or used for any commercial purpose.

"We will be publishing an interim report as soon as possible so that residents can compare their renewal terms with our results to see if their insurer is being fair."

The group says Morpeth residents and businesses may be being treated unfairly by insurance companies and that if cover is being withdrawn it will be in breach of the Statement of Principles on the Provision of Flood Insurance, agreed between the Government and the ABI.

Morpeth town centre fits into Category 2 of the provisions as it has a higher risk of flooding (more than once every 75 years), but the Environment Agency has a commitment to construct a flood alleviation scheme within five years.

The industry has agreed to continue cover for Category 2 properties provided there is confirmation of the Environment Agency's plans, but premiums and excesses will be re-assessed to reflect the degree of risk.
An ABI spokeswoman said the organisation was not aware of problems in Morpeth, but that all types of insurance premiums or excesses are liable to increase when a claim is made.

"We are not aware of any problems in Morpeth and it would surprise me if insurance companies are trying to withdraw cover," she said.

"It might be a case of people trying to get insurance cover who don't have it already, but if you have got insurance there is no reason why the insurance company won't continue to insure you.

"A different insurance company might decline, but your existing one should be fine.

"The Statement of Principles doesn't set any premiums or excesses. Premiums could rise due to the loss of a no claims bonus, just like they would with a car if you made a claim, and excesses will depend on the risk to those properties."

Customers are advised to negotiate with companies and shop around for the best deals.

The questionnaire is being circulated by the MFAG throughout the area and by Castle Morpeth Council via its Springboard flood bulletins. It is also available on line at www.morpethfloodaction.org.uk

The action group will hold a public meeting at Morpeth First School, Goosehill, from 7pm on Monday to discuss the issue.