More affordable home insurance for flood areas

Homeowners in flood-prone areas will have access to more affordable home insurance from April 2016.

A joint scheme between the Government and the insurance industry allows insurers to offset the expense of a flood claim by providing access to a central fund specifically for claims of this type.

First announced in 2010, the scheme was sparked by changes in weather patterns as well as a shift in areas now affected by flooding. It is a welcome relief to many homeowners.

The Government “Flood Re” scheme is reported to cap the cost of flood insurance for around 350,000 homes*.

The new flood fund will be funded in 2 ways. Those in flood areas will be paying more than average households, but less than they might have done in years gone by. In addition, a small amount is likely to be added to everyone’s premium, to help ensure that those in flood areas can still have insurance.

“Flooding can devastate people’s lives and homes and while nothing can take away the distress it can cause, having access to affordable insurance will give people peace of mind.” (www.floodre.co.uk)

Key points:

• Combined Government and insurance industry scheme
• The scheme goes live in April 2016
• Financed and run by UK insurers
• Will allow homeowners to take out and obtain affordable insurance

The Flood Re scheme is ultimately a solution to a long-standing problem and aims to provide peace of mind to many, giving future security even for high-risk households.

¹Telegraph (2015): http://www.telegraph.co.uk/finance/personalfinance/insurance/buildingsandcontent/12045772/Flood-insurance-will-policies-pay.html.