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Winner Morpeth Town Council Civic Awards Community Group 2014
The Morpeth Model is similar to the ABI “Flood Re” model that affordable flood insurance should be built round subsidy from within the industry. If major flood events occur in consecutive years in the early years of establishing the model there would be the need for a loan, from either the government or the insurance industry, to cover any shortfall in resources. Any such loan would be repaid from the pool as the amounts ceded to it were adjusted to match the costs of flooding events year on year.
1. A pool would be set up to help cover claims for flood damage to properties at high risk of flooding.
2. There would be a levy on all household insurance policies which would be paid into the pool. In the interest of transparency this would be called the Community Flood Levy. The levy would have to be based on the value of the property for it to be considered equitable.
3. Insurance companies would assess the flood risk portion of the premium in the usual way to produce the risk-
4. The risk-
5. Only a percentage of the risk-
6. The premium charged to the policy holder would comprise the amount for the other elements of the package together with the Community Flood Levy, the risk-
7. The amount paid into the pool from each policy premium by the insurance company would comprise the Community Flood Levy together with the percentage of risk-
8. Since high excesses do not encourage the installation of resilience and resistance measures, they present an obstacle to progress. Insurance companies would inevitably compete to find optimum levels for excesses.
9. The insurance industry would be responsible for ensuring that the pool remained solvent and it would therefore determine the amount paid by policy holders under the Community Flood Levy, adjusting that amount in response to unfolding events.
10. The threshold premium and the proportion to be paid into the pool would be determined by the government as part of its responsibility for oversight of the whole process.
11. The pool would be managed and administered by the insurance industry.
12. A flood damage claim would be administered by the insurance company holding the policy. If the flood element of the premium was below the threshold the insuring company would be responsible for covering the full cost of reinstatement. If there was an element of the premium above the threshold level then the insurance company would settle the full amount of the claim but would be able to draw down from the pool the percentage of the risk-