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Joint Statement on the Provision of Flood Insurance


On December 17, 2008, the Scottish Government and the Association of British Insurers (ABI) issued a Statement of Principles on the provision of flood insurance.

Under the agreement, the ABI and the Scottish Government will work together on measures to manage and reduce the growing flood threat. This includes the Scottish Government developing a long-term flood strategy and carrying out a detailed assessment of the flood risk in Scotland from rivers, the sea and surface water. The Flood Risk Management (Scotland) Bill will create the framework for this strategy.

Environment Minister Michael Russell said:

"While flood defences, effective surface water management, flood warnings and other policies can reduce the risk from flooding, these risks can never be completely eliminated.

"This historic agreement enables households and small businesses to plan for and minimise the financial cost of flooding while insurers provide effective and efficient claims services and repair teams should flooding occur. It confirms our shared commitment to work together to provide a long-term solution that will enable flood insurance to remain as affordable and widely available as possible."

Justin Jacobs, the ABI's Assistant Director of Property Insurance said:

"Today's agreement is good news for Scottish customers. The Scottish Government rightly recognises that a long-term flood strategy, backed by adequate resources and funding, is the best way to manage the growing flood threat. We look forward to continuing to work with them to ensure that these measures are implemented so that flood protection relied upon by homeowners and businesses remains widely available."

The agreement details a range of measures which include:

  • improving understanding and awareness of flood risk
  • developing a long-term strategy (of over 25 years) to reduce flood risk and encourage action to mitigate and minimise the risks and costs of flooding
  • reinstating flood damaged property in a more resilient way
  • ensuring the planning system prevents inappropriate development in flood-risk areas
  • ensuring any essential new development in medium to high-risk areas is flood resistant
  • providing information about how to obtain flood insurance and promote access to insurance for low-income households

Implementing these measures to manage flood risk will ensure that flood insurance remains widely available and competitively priced. ABI members have agreed that this statement will remain in place for existing Scottish policyholders over the next five years.

Statement of Principles on the Provision of Flood Insurance.