Frequently Asked Questions
I have been flooded this Christmas and my current insurer has decided not to renew my policy. Where can I find insurance?
From April 2016 a wider number of insurers will be able to offer you flood insurance as they will be using the Flood Re scheme. If you are struggling to find insurance cover before this date, you should try using a specialist broker who should be able to help you. The British Insurance Brokers Association (BIBA) has a ‘find a broker’ service and if you add your postcode, select that you require buildings/ contents insurance and that you are in a flood zone you will be shown a map with brokers who will be able to help you. http://www.biba.org.uk/CustomerHome.aspx
Will the cost of home insurance fall as a result of Flood Re?
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 due to a combination of insurers being able to pass the flood risk to Flood Re, and the policyholder now being able to shop around in a more competitive market that may have been closed to them.
Flood Re will not set prices for home insurance, but will give insurers the opportunity of passing to them the flood risk element of a home insurance policy (buildings and contents) at a premium that will be capped, depending on the Council Tax band of the property. It will be up to an insurer to decide if they wish to pass the flood risk element of the cover to Flood Re.
Will customers need to have any direct contact with Flood Re?
Customers will continue to buy their home insurance in the same way as before, and all the contact will be directly with their chosen insurer. If a customer needs to make a claim, they should contact their insurance company directly, just as they do now. Flood Re will work ‘behind the scenes’ with the insurance company, to reimburse them for any payments they make to their customers and so there will be no need for homeowners to contact Flood Re directly.
What does the scheme mean for customers? Will insurance premiums be capped?
Insurers will still be in control of pricing for overall home insurance. Flood Re will charge a fixed premium per policy to insurers, relating to the flood element of the policies transferred to Flood Re. These premiums will be lower than would be the case if the flood risks were fully taken into account, as contributions to the costs will come from a statutory levy on all home insurers in the UK.
Flood Re also offers insurers an excess per policy of £250. Although Flood Re has no control over the way insurers set the excesses for individual customers, this mechanism should benefit people living in areas at risk of flooding.
I am at low flood risk, so why should I have to pay the levy on my home insurance so that someone at higher flood risk can get affordable flood insurance?
The Flood Re levy is a new charge on insurers based on market share. Insurers will now be eligible to cede selected properties to Flood Re, but will continue to decide on the overall premium charged to individual customers as usual. Better information is now available that shows many people are potentially at flood risk from flash flooding, for instance, and not just people living near a river or the sea. Having property insurance that includes flood cover is usually crucial in getting a mortgage. So if flood insurance was to become harder to obtain and more expensive, this could have serious repercussions for the whole property market.
With Flood Re being reviewed every 5 years, what guarantee is there that the level of the premium cap and/or the levy will not increase in the future?
Any changes that may be needed at each 5 year review will reflect the need for the transition to risk reflective premiums over Flood Re’s 25 year existence. Any changes that are considered necessary will be discussed with and approved by the Secretary of State.
We are planning on buying a holiday home but have been told that we will find it very difficult to get insurance as it is in a flood risk area. Will this be included in the Flood Re scheme?
Your holiday home will be included if the insurance policy is taken out in your name and meets the other key criteria of the scheme. These are that the property has a council tax band and is used for residential purposes only. The holder of the policy, or their immediate family, must live in the home for some or all of the time or the home must be unoccupied.
If you are purchasing this home as a holiday let and you are not using it for personal use then it will be excluded from the scheme.
Will my caravan be covered under the Flood Re scheme?
If you have a static caravan and it has a council tax band then your caravan will be eligible for Flood Re. However, if your caravan is part of a commercial caravan park and let out as a business it will not be included. If you own a caravan which sits on your drive and you use it for holidays then this will be covered either under your motor insurance or a separate caravan policy and therefore will be excluded from Flood Re.
My property is termed 'medium' risk and as such I cannot find affordable home insurance. Will Flood Re cover me even though my home is not deemed to be a high risk property?
The assessment of the level of flood risk is not part of the decision making process as to whether your property is eligible to benefit from Flood Re. To be eligible for Flood Re your home must have been built before 1st January 2009, be insured by the individual home owner (not a company) and have a council tax band. If those key conditions are met then you will be able to benefit from Flood Re via an insurer who is participating in the Flood Re scheme.
Why hasn’t the scope of Flood Re been extended to include properties built after 2009?
The reason for maintaining 2009 as the cut-off point is to ensure continuity with the Statement of Principles which did not apply to properties built after 1st January of that year. Flood Re should incentivise rigorous and responsible planning decisions.