The British government has refused to bankroll a fund to subsidise insurance for households in flood-prone areas, derailing talks over the scheme and potentially leaving 200,000 homes without protection.
The government has told insurers it will not provide an overdraft to the proposed fund, leaving talks over the plan deadlocked, the Association of British Insurers said on Monday (November 26).
The impasse comes amid renewed heavy flooding across England, with 500 properties affected since last week and 70,000 more at risk, according to Britain's Environment Agency.
Britain has been hit by several severe floods over the past ten years, with one in the summer of 2007 costing insurers about 3 billion pounds ($4.8 billion).
The owners of about 200,000 British homes in areas at risk of flooding can afford insurance only because of a deal under which insurers agreed to cover them at a loss in return for a government pledge to boost spending on flood defences.
Flooding continues in UK (0:33)
Nov. 27 - Massive flooding continues in parts of England and Wales. Rough Cut (no reporter narration). ( Transcript )