A new scheme, called Flood Re, is being launched today to make insurance more affordable for households at highest risk of flooding.
After a rough winter, with over 15,000 claims made as a consequence of storms Desmond, Eva and Frank (ABI data), insurance companies and the Government agreed to renew the outdated Flood Insurance Statement of Principles (2000).
Under the previous scheme, insurers were only obliged to provide flood cover to their existing costumers, restricting the choice of insurance’s providers for new house owners. Also, the agreement failed to foresee the costs of policies for houses at highest risk (26,097 in the East Midlands only, according to Flood Re).
Now, the premiums that house owners will have to pay will take into account the property’s tax band, other than the likelihood of flooding. “These premiums,” said Flood Re company “will be lower than would be the case if the flood risks were fully taken into account.”
The company said: “Those people who pay higher premiums as a result of their home having flooded, could expect their home insurance to become more affordable.”
This is a result of insurers passing the flood-risk element of policies to Flood Re and also of people being able to shop in a more competitive market, with a wider range of insurance plans to choose from.
As of today, 17 are the industries that have taken part in the Floor Re scheme. For more information on the scheme and on eligibility, click here.