Flood insurance in Scotland: a cause for serious concern

Abstract

The availability of flood insurance to compensate victims for the financial losses they incur from flooding is fundamental to flood risk management in UK in underpinning government risk management measures. Yet in Scotland, insurance penetration rates in the population are low for those in the lower deciles of gross weekly income, and for those living in rented accommodation. The subsidised affordable policies available under Flood Re are not available to this fraction of the population, as they do not insure now and therefore are not eligible. The rented segment of the housing market is expanding, leaving an increasingly large number of people likely not to insure against flood damage although many will hopefully have damage to the structure of their houses covered by landlords’ insurance policies. The vulnerability to flooding of Scottish households with low incomes in rented accommodation is a most unsatisfactory situation, particularly as climate change appears to have greatest impact in increasing flood severity in such deprived and disadvantaged neighbourhoods.