Flood Funding

Written evidence submitted by Jeff Charlton

I believe the parliamentary groups are missing the biggest issue and part of the insurance regarding floodplain and insurance.

I believe you are assessing the following:

1.            Flood defences and general protection

2.            Insurance industry and their costs and proposals

This appears to be ignoring the single most important cost element which is the cost of damage repair and why this is so expensive and disrupts communities for such long periods.

You might be surprised to know:

•             Insurers operate a virtual cartel and have stifled the UK restoration industry with their "Nominated Contractor" networks

•             Loss adjusters even chartered have no training in flood damage but manage claims

•             There is no UK recognised training or certification in flood or water damage repair

•             Insurers have squeezed contractors’ costs so much that rip out and gutting of properties is more profitable than drying them

•             Despite squeezing contractors costs claim costs have escalated

•             New technology in restoration and building is ignored

•             Building and restoration (drying and salvage) are mistakenly considered two separate operations often leading to duplicated costs.

•             The UK currently does not have a competitive flood or disaster recovery industry

Independent audits of state owned insurance companies have shown cost savings of 40% and time lines to completion reduced by 70% but the ABI member insurers have ignored these facts and you have to wonder WHY?

The issue of insurance of flood plain is not about increased premium but affordability and value for money.

Currently there are no recognised procedures for repairing flooded homes other than install a nominated contractor who depending on their opinion and ability will gut, rip out or salvage and repair/replace the property and contents.

The insured is expected to stand aside until such time as someone from the insurance company arrives and watch damage escalate to levels where disposal is the only option.

The incompetence of contractors and claim management has been apparent in every claim audited since the Lewes floods of 1999 and examples can be seen on www.claimtech.co.uk - see Cockermouth and Carlisle audits.

The issue of flood plain insurance is not cost, but scope of cover and we have discussed an insurance policy with brokers who will provide home owners and mortgagees with a basic policy which will return the property to pre loss condition at normal insurance premium.

There are caveats which places emphasis on self-help such as moving valuable items out of harm’s way (when warning is given) and limitations on contents. The basis of cover is clean up, sanitation and drying with localised repair. The contractor network can if required provide addition al services too but these will be over and above policy cover.

Contractors utilised in this project will follow moral ethical and transparent protocols and will be wherever possible be recruited or supported by local business as they are recognised as stakeholders in their own local communities.

The details of cover and premium can be discussed and agreed by relevant stakeholders to form a national agreement.

With my colleagues within the industry and including the AIBC I believe we can provide a nationwide competitive contractor network capable of undertaking not only flood issues but general disaster recovery, building and restoration issues.

I am an expert in this field and currently the person writing the new UK industry guidelines and standards for flood restoration (BDMA) (AIBC) and committee member of the new British Standards PAS 64 on flood restoration.

February 2013