'Squirming' by insurers

INSURANCE companies have been accused of trying to "squirm out" of providing flooding cover after they warned the Government they would withdraw services from areas at risk in a row over how much money is being spent on defences.

And households are worried the move could even hit safe properties which happen to be in the same area as those in danger of being deluged, should there be a repeat of the disaster in June.

Following the flooding which hit South Yorkshire, people were denied insurance by some companies just because they were in Sheffield - regardless of whether their home was in a valley.

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Jon Pickles, who was refused a quote even though he lives in Intake - on top of a hill - said: "It seems insurance companies try to squirm out of paying whenever they can."

The Association of British Insurers have been urging Gordon Brown to boost the annual cash pot for flood defences and tackling coastal erosion to 750m by next year.

Instead, annual spending will rise to 800m by 2010/11. The ABI has warned that the Government's extra money for flood defences is so low that it will review the provision of flood insurance services.

ABI chief executive Stephen Haddrill said: "We really want to carry on being able to provide this service. But, obviously, we can't keep providing it at significant loss."

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Sheffield Brightside MP David Blunkett branded Mr Haddrill's comments "deeply unhelpful".

He said homeowners will conclude that "the industry wishes to remove any commercial risk to their own profits and place that risk instead on the current and future policy holders, including the families and businesses in my own constituency."

Mr Brown said: "I hope they will not take the step that they are suggesting might be considered, to deny people insurance."

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