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Flood Re Information

By
Sarah Easom
on
June 22, 2022

The effects of climate change have increased episodes of flooding, meaning that an increasing number of properties are being affected.

In this Q&A we explain what Flood Re, an initiative to make flood cover more affordable, is and how it affects you. If you have any further questions about Flood re or flood insurance, please contact our head of private clients Sarah Easom s.easom@hallettindependent.com

Q. What is Flood Re and why am I paying a premium to them/has my flood risk been passed over to them?

A. Flood Re, a not for profit ‘fund’ or ‘pool’, is an initiative between the government and the insurance industry, was set up in 2016 in order to make flood cover more affordable for properties deemed to be at risk of flooding.    

Any insurer who offers household cover must pay a ‘levy’ contribution into the Flood Re pool.  Insurers can then choose to cede the flood risk on certain policies totally to Flood Re.  If your insurer does this, they will tell you and also confirm the Flood Re premium (the entirety of which is paid to Flood Re, your insurers do not keep any).  The premium is a set premium based on the property’s Council Tax band.   The excess is £250.

Q. Why do we need Flood Re?  

A. The effects of climate change have increased episodes of flooding over the past 10 years and will continue to do so. An increasing number of properties have already been effected and will be continue to be. The severity of flood claims has also increased, with an average claim amount now said to be £50,000.

When a particular risk increases with the possibility of a large number of people being affected, it can become difficult for individual insurers to offer cover at affordable premiums - which is bad news for customers.  A re-insurance scheme was therefore set up to keep flood premiums affordable and allow insurers to continue to offer this cover.  

Q. Who tells me if my home is in a flood area?

A. Insurers calculate flood risk a number of different ways: using data from the environment agency, from flood mapping software plus data they have collected from their own claims and from other sources – like the Association of British Insurers ABI.  As insurers use different data they do all vary in approach.  However, the criteria for being able to cede a risk to Flood re is set.  See below for who qualifies for Flood Re.

You can check your flood risk here  https://www.gov.uk/check-long-term-flood-risk

Many insurers will consider your property at a high risk of flooding if you have a habitable basement as you are at risk from surface water flooding as was seen in the London flash floods in summer 2021.

Q. How will my claim by dealt with by Flood Re?

A. The claim would be dealt with by your broker and/or insurers as with any other claim.  Flood Re will work behind the scenes with the insurers to re-imburse you for any payments that need to be made so there will be no need for you to contact Flood Re directly.  

Q. What cover do I need against flooding?

A. As well as cover for your buildings and contents, you should check your policy offers cover for temporary accommodation or for any rent you are still legally required to pay; and any rent you will no longer be paid until your property can be loved in again.  Check your policy for limits in relation to this.

Q. Do I qualify for Flood Re?

A. There are some conditions applicable in order to qualify for Flood Re cover. The main ones are:

•   Properties that are held in the name of an individual, trust, or personal representative of an individual

•   Private residential properties

•   Properties that are lived in by the individual or their immediate families.  Alternatively, they must be unoccupied

•   Properties with a Council Tax Band A-H

•   Built before 1st January 2009

•   Property is located within the UK comprising England, Wales, Scotland and Northern Ireland (excluding the Isle of Man and the Channel Islands)

Useful websites and further reading

Flood Re https://www.floodre.co.uk/

Ecclesiastical https://www.ecclesiastical.com/individuals/home-insurance/flood-re/

Axa XL  https://axaxl.com/-/media/axaxl/files/pdfs/campaign/reinsurance-outlook/downloads/rebranded-axa-xl-government-pools-report.pdf?sc_lang=en&hash=916BF269442F5335CA94CCBEB1667F03

Aviva https://www.aviva.co.uk/insurance/home-products/buildings-insurance/the-flood-re-scheme/