The Association of British Insurers (ABI) has announced a memorandum of understanding with the government that will see flood-prone areas covered by home insurance policies.
There had been significant anxiety among householders in low-lying areas that an agreement between Whitehall and the ABI – which saw products still offered to residents in riskier areas – would not be extended by the organisation.
However, insurers have confirmed that flood insurance will remain affordable for all in the UK and that a shared vision between government ministers and themselves had been arranged.
Environment secretary Owen Paterson said: “Flooding is terrible for anyone affected by it. We have worked extremely hard with the industry to reach an agreement on the future of flood insurance.”
Mr Paterson added there were still minor details that need to be ironed out, but that those who feared they would be left without any cover could rest assured it would be provided in the near future.
It is thought the solution will involve the creation of a not-for-profit fund that will be run and financed by ABI members.