The state of the UK economy, much like many other developed nations, is in a pretty poor state as a result of the world wide recession. The floods during the summer of 2012 have made the situation far worse. Unrelenting rain showers have caused havoc to home owners, business and services. The flood waters inflicted widespread damage to the extent that many businesses had to be closed down and some homes having to be demolished. Since three years ago, when we experienced the last major onslaught of flooding, these events seem to be more commonplace in 2012.
As a result this has, of course, led to a disastrous knock on effect to the wider economy. We have already began to hear talk of food prices going through the roof (rising as much as 6.4 per cent) as farmers struggle with poor harvests as well as damage to their existing stocks and commodities.? Wheat prices, alone, are up 29 per cent following a 14.1 per cent fall in yield. Additionally, the transport system was brought to a standstill in some areas as roads and rail tracks were quickly turned into lakes.
The insurance industry has reported record claims this year. The initial estimate in various parts of the country has hit the tens of millions of pounds.? In fact; from as early as June 2012, the Association of British Insurers estimated that the total cost of claims had amounted to ?207m; a figure which is made up of several areas in the country.
The wet weather and flooding is extremely bad for business, as many retailers have seen a significant drop in sales of items such as barbecues, salad and traditional summer clothing.? There is also the negative affect to tourism as holidaymakers chose to vacation where the sun is shining as the prospect of rain showers day after day is somewhat of a turn off to say the least.
These are conditions which we might just have to get used to in the future and it is one of the reasons why the government has taken steps to protect the nation against flooding.? A system of flood barriers had been planned in an attempt to, not only tackle the floods, but also to alleviate any ongoing fears that homeowners may have. These defences are expected to cost in the region of ?860 million by 2015. The village of Cockermouth which was the subject of the extremely devastating flood in 2009 has already had some defences put in. The residents were so keen to safeguard their village that the majority of them agreed to pay ?1m of the costs which came directly out of council tax increases.
However there is concern that the government may be back tracking in terms of the amount they are prepared to spend on flood protection. According to reports, 300 of the planned flood defence projects across the country have not began as yet. This is certainly the case for Morpeth, Northumberland, which faced its second terrible spate of flooding since 2008. The truth is that such procedures are ever more unlikely to be put into place, since the government has announced drastic cuts to its spending budget. Documents discovered from the Environment Agency highlights a further 864 projects which have had to have their budgets significantly modified for 2012/2013 or further external contributions sought.
It is of course a worrying prospect for those people who have already had their insurance premiums tripled with seemingly no light at the end of the tunnel. If investment is not directed into protecting the nation from the debilitating flood waters then the country may take an economic hit that it might just not be able to recover from. Any hope that remains lies in the hands of ABI and the government. It is up to them to work together and take action to ensure the proper procedures and risk prevention is in place for the likelihood of future incidences.
PolicyExpert.co.uk home insurance
Source: http://www.publicservice.co.uk/feature_story.asp?id=21301
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