esure heads for the high ground over flooding

The insurer will no longer offer home insurance for houses built on flood plains or in areas prone to repeated flooding.

The move comes before the end of the year, when the two-year flooding moratorium expires (under which insurers had agreed to continue providing flood insurance cover to existing domestic and small business customers in all but exceptional circumstances).

Peter Graham, chief executive at esure, said: "esure is entirely sympathetic to homeowners who live in floodrisk areas or on flood plains but they have been let down badly by years of government failure to improve the UK’s flood funding, planning and defences. Following severe localised flooding in recent years, we believe that the dry majority is now being unfairly penalised through their home insurance premiums on account of the failure to address the risks facing houses built on flood plains and standing in flood-prone areas.

"We will be calling - along with the industry - for improvements to both the funding and co-ordination of flood protection. However, we currently have only a handful of customers in affected areas and — unlike most other insurers — we can make a clean and clear break. From today, our customers will benefit from knowing that our home insurance premiums reflect the effective removal of the floodrisk element.

"This gives the majority of homeowners a clear low-risk or all-risk choice. With flooding risks excluded this could knock an average of £30 per policy off the cost of cover and together with the other risk controls we apply, total savings of around 30 per cent on home insurance costs. We believe that benefit is worth pursuing for customers and so right for us to offer."

The change does not affect existing customers who currently live in floodrisk areas.