Frequently Asked Questions
I have been flooded and my current insurer has decided not to renew my policy. Where can I find insurance?
Since April 2016 a large number of insurers have been using the Flood Re scheme who will be able to offer you flood insurance. To find an insurer and obtain cover, please visit our Find An Insurer page.
Has the cost of home insurance fallen as a result of Flood Re?
Those people who pay higher premiums as a result of their home having flooded, should find their home insurance 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 does not set prices for home insurance, but gives insurers the opportunity of passing on the flood risk element of a home insurance policy (buildings and contents) at a premium that is capped, according to the Council Tax band of the property. It is up to an insurer to decide if they wish to pass the flood risk element of the cover to Flood Re or not.
Do customers need to have any direct contact with Flood Re?
Customers continue to buy their home insurance in the same way as before, and all contact is 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 then 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 householders to contact Flood Re directly.
What does the scheme mean for customers? Are insurance premiums be capped?
Insurers are still in control of pricing for overall home insurance. Flood Re charges 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 are now eligible to cede selected properties to Flood Re, but 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 to premium levels that are considered necessary will be discussed with and approved by the Secretary of State, and implemented by the UK Government through a change in legislation.
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, was built prior to January 2009 and is used for residential purposes. 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.
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 fulfill the Flood Re eligibility criteria, such as 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.
Will Flood Re reinsure leasehold properties?
Yes. Leasehold properties are eligible for the Scheme if they:
(1) fulfill the definition of a “Dwelling”;
(2) the leaseholder has an obligation in their lease to insure the structure of the Dwelling; and
(3) all other eligibility requirements are met.
Under English law, it is unusual for short-term leaseholders to have this obligation as it usually remains with the freeholder. It is more typical of longer term leases (e.g. 999 year leaseholders) where the rights and obligations are akin to a freehold interest. Insurers should ensure that they have in place appropriate controls to check that leasehold properties being ceded to the Scheme meet this requirement.
Are flats eligible for the Scheme?
Yes. It is possible for an individual flat to meet the definition of a “Dwelling” (being part of a building and a single residential unit).
Where a flat is owned on a leasehold basis and the leaseholder has the obligation to insure the structure of the flat itself (see number 1 above), and the insurance policy meets all other eligibility criteria, it is possible to cede it to the Scheme. Again, under English law, it is very unusual for leasehold flat owners to have the necessary rights or obligations to insure the structure of their individual flat so insurers should specifically check this before ceding flats to the Scheme.
For the avoidance of doubt, a block of flats together would not meet the definition of a “Dwelling”.
Will Flood Re reinsure properties that were built in 2008 but didn’t receive a Council Tax Band until 2009?
Only properties that were built, as evidenced by the Council Tax Register, prior to January 2009 are eligible for the Scheme. However, Flood Re is aware of certain instances where a build had been completed in 2008 and the dwelling was used as residential premises, but a Council Tax Band was not issued until 2009 due to a delay in administrative proceedings. In such cases, Flood Re will accept these premises provided that the owner can show to Flood Re’s satisfaction that they lived in the premises, using them as their home, prior to January 2009. This can be evidenced, for example, through furnishing a utility bill.
Note that this exception does not apply to properties that were built and used as commercial premises and only converted to residential dwellings after January 2009.
Will Flood Re accept properties where the build was started pre-January 2009 but was not completed until after that date?
No. Flood Re will only reinsure properties where the build was completed prior to January 2009.
Would the structure and contents of an extension which is in the process of being built (but not yet completed) be covered by the Scheme in case of damage caused by flooding?
Yes. The structure of such an extension would be covered as it would form part of the already existing “Dwelling”. The contents of such an extension would only be covered if they fulfill the definition of “Contents” in the home insurance policy. For the avoidance of doubt, we would not expect professional trade tools and materials to meet the definition of “Contents”.
If Household Premises made up of two or three flats are insured in the name of a management company, could this still be eligible for the Scheme?
The Scheme Document states that the insurance policy has to be either in the name of an individual or individuals, or held on trust for that individual or individuals. Therefore, it is possible for a management company to obtain insurance on trust for the owners of the two or three separate flats within the Household Premises, so long as this is structured as a true legal trust.
For how long or how often does a policy holder or their immediate family need to live in a property for it to be eligible for the Scheme?
The eligibility criteria include the requirement for the policyholder or an immediate family member to live in the property for “some or all of the time” during the policy period. A number of participants have asked that Flood Re better specifies what amounts to “some of the time”. Rather than specifying a numerical value for “some of the time”, we would draw your attention to the fact that the requirement for a homeowner to live in the insured property for “some or all of the time” is just one of the eligibility criteria. As a fundamental starting point, the policy being ceded to Flood Re must still meet the basic definition of a “Home Insurance Policy” as defined in the Scheme documents and should not be on different terms to an insurer’s standard home insurance policy.
By way of example only, Flood Re would not expect to be ceded a home insurance policy relating to a property which had a tenancy agreement in place for all or part of the policy period because a policy designed to meet the needs of a landlord’s risks would not normally feature in a standard home insurance policy. Furthermore, we would not normally expect any given insured to have more than one home insurance policy in place.
Insureds may occasionally rent out their entire home or part of it for short periods, such as a few days or weeks in accordance with the terms of their Home Insurance Policy and those properties can be ceded subject to meeting all other requirements.
Flood Re requires insurers to meet all of the eligibility requirements, in good faith. The Scheme is designed to assist householders most at risk of flooding, not businesses or properties being rented out for commercial gain. Flood Re’s own reinsurance is based on the same eligibility criteria so it is important that only eligible risks are ceded to us.
Can a second building (shed, outbuilding…etc) at the same risk address as the main home be included under the same home insurance policy?
Yes. Outbuildings “enjoyed with” the primary residence can be ceded under a single home insurance policy provided that they do not have a separate Council Tax Band and do not attract business rates. There is no upper limit to the number of additional buildings on that basis. Outbuildings do not need to meet the pre-2009 build date requirement.
Can mixed-use premises be ceded into the Scheme?
Yes. Dwellings which form part of a single mixed-use property can be eligible for Buildings/Combined cover if the Dwelling has its own Council Tax Band and does not attract business rates. Examples include B&Bs and homes where incidental business activity takes place. However, Flood Re can only accept policies that fulfil the definition of a “Home Insurance Policy”, where such policies are not being treated differently to non-Flood Re ceded policies.
If insurers are seeking to cover a home as part of a wider insurance policy, for example, a farmhouse under an existing farm policy, Flood Re expects a designated premium to relate to the Dwelling element and for the policy to meet the other eligibility criteria, including being in the name of an individual.
For the avoidance of doubt, Flood Re will only cover contents and fixtures and fittings that relate to the residential part of any mixed use premises. We would not expect appliances and trade tools used solely for business purposes (such as dog grooming appliances or hairdressing tools) to be covered by Flood Re’s definition of “Contents”.
Will Flood Re cover claims for resilient repair?
No. In line with its Transition Plan, Flood Re is currently carrying out research into the relative value and effectiveness of resilience measures and will report separately on its findings in due course. In the meanwhile, in accordance with the terms of the Treaty, Flood Re will not indemnify insurers for resilient repair. The definitions of “Loss” and “Flood Risk Element” currently preclude claims payments covering betterment for the purpose of potential resilient repair. Therefore, Flood Re will only indemnify insurers for the cost of like for like repairs and will not follow the fortunes of underlying policies even if they allow for betterment as a standard term. Any payments made to an insured above the cost of like for like repairs will be borne by the insurer. For the avoidance of doubt, where building work has to be completed to a higher standard due to a change in laws or regulations, then such build difference will not be considered “betterment”, provided it is the insurer’s normal practice to indemnify such cost within a New-for-old cover.
Will Flood Re cover contents that are located away from the insured property?
No. Flood Re will only reimburse insurers for damage done to contents located in the Dwelling affected by the flood in question. This is because the definition of “Contents” relates to the “Dwelling” in which they are located and the purpose of the Scheme is to help protect homes at risk of flooding and their contents.