According to a recent study, the new plans from the government underestimate the risk and its associated cost.
Researchers have been analyzing the data from the newly created flood insurance program from the government of the United Kingdom and are predicting that it will fall short because it has underestimated the number of properties that are at risk of rising waters as a result of climate change.
The study proposes that climate change will vastly increase the number of properties at risk of flooding.
The research was conducted by a team at the London School of Economics (LSE). Its conclusion was that the new flood insurance program from the government to protect homes in England and Wales has greatly underestimated how many of those properties are actually at risk. Their data shows that the number of homes that are likely to be at risk of considerable damage from floodwaters will be up to 800,000 over the next decade.
The research also showed that flood insurance will become tremendously more important in the future.
Over the longer term, by the year 2050, even the more conservative estimates have shown that the Flood Re program will need to cover about 1.5 million properties if it wants to keep up with the coverage level that it is proposing. Comparatively, there were only 370,000 in 2008 that were at risk. This changes the flood insurance need dramatically.
However, even though the government worked with the industry in order to create its flood insurance program, the report says that its numbers are far lower than what is widely believed to be the true risk. The report on the research said that the £180 million per year program assumes that there will be only 500,000 properties at risk of flooding damage. The program will be paid for through a levy of £10.50 per year on home insurance premiums, which is paid equally by those who are and who are not at risk.
The research from the London School of Economics team stated that by implementing these risk assumptions into the flood insurance program, which will become effective in 2015 and run until 2035, could place homeowners in a very vulnerable position.