- Associated Press - Sunday, December 2, 2012

LONDON — Lynne Jones‘ cozy bed-and-breakfast in Britain’s Lake District boasts views over the River Greta where heron come to feed and a panoramic vista of Skiddaw mountain.

Ms. Jones says her B&B has another virtue: It’s practically watertight.

In an island nation where some 920 homes have flooded and at least three people have died in the past week, that’s saying something.

“It’s almost an ark,” she said. “Short of actually letting it float, we’ve done everything we can to protect it.”

But the floodgates and other fixtures Ms. Jones installed haven’t led to lower insurance premiums.

And things may get worse, as the British government and British insurers battle over a deal that would provide state guarantees for flood coverage at a time when losses are expected to rise because of climate change.

With more storms on the way, the government and the insurance industry are engaged in mutual finger-pointing.

Insurers say the government is failing to provide homeowners the type of guarantees that other European countries and the U.S. do, while the government is accusing the industry of whipping up people’s fears by publicizing its negotiating position even before floodwaters have receded.

If a deal isn’t struck by the end of June, as many as 200,000 people in Britain could lose their insurance or find it too expensive to pay premiums that are certain to rise without government guarantees.

All this comes as the European Environment Agency reported that the changing climate has caused an overall rise in sea levels globally and along most of the region’s coasts.

There also has been an increase in flooding along streams and rivers.

Talk but no action

Floods and storms account for around two-thirds of the costs for natural disasters, the agency concluded. And those costs continue to rise.

“The contribution of climate change to the damage costs from natural disasters is expected to increase in the future due to the projected increase in the intensity and frequency of extreme weather,” the report says.

Mindful of the trend, British insurers want to place a surcharge on all insurance premiums to create a new funding pot to cover flooding claims.

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