what is Flood ReIn recent years there has been increased frequency of major flooding in the United Kingdom that has caused those living in the affected areas to be faced with greatly increased insurance premiums and in some extreme cases a lack of availability of a suitable insurance product to protect their home and contents.

The UK Government and insurance industry determined that a facility should be available to those in affected areas to obtain the relevant flood insurance at a reasonable cost. This facility is provided by Flood Re, a reinsurance company, that is funded by a levy on insurance companies and is available to insurers to carry the financial cost of claims arising from flood.

Who is the Flood Re scheme designed to help?

The scheme is aimed at providing affordable home insurance to private individuals, it does not apply to business or commercial premises and perhaps significantly holiday let properties.

Is the Flood Re scheme available to caravan and park home residents?

The scheme is available to caravan and park home residents where the property is subject to a council tax banding and is not used for any purpose other than the residence of the policyholder or their immediate family. Unoccupied properties can be covered subject to the preceding criteria.

Do I need to contact Flood Re to arrange flood insurance?

Customers will continue to deal with insurance companies in the same way as previously and will have no direct contact with Flood Re. The insurance company will deal with any aspect of involvement with Flood Re.

How much does Flood Insurance cost from Flood Re?

Whilst the scheme is funder by a levy of insurance companies, insurers will also pay a premium in respect of each risk ceded to Flood Re. The charge for this is a flat premium based upon the council tax banding of the property.

This will not be paid directly to Flood Re by the policyholder but will form part of the overall premium charged by the insurance company for the home insurance policy. Under these arrangements it is still in the hands of insurance company underwriters what premium they charge for the policy and competitive forces will still apply.

 
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