If you’re reading this article, then you might have heard of the government scheme called Flood Re. As the name suggests, it relates to flood insurance and in this post we’ll go into a bit of detail on how it all works and the benefits of the scheme.
Back in 2016, the government created the Flood Re scheme as a longer-term solution to making flood insurance more affordable, which is currently planned to run until at least 2039. The problem is that when a house has been flooded or is deemed to be in an area that is at a high risk of flooding, then insurers don’t want to insure it. Flood claims are very expensive, and much more likely to occur in flood risk areas or areas that have flooded before. This leads to many insurers either declining to cover such properties or pricing themselves out with incredibly high premiums. The government saw this as a problem, as individuals were finding themselves unable to buy or afford insurance for these homes.
All insurers pay a levy each year into a central pot of money under the scheme. If an insurer sells a policy that is covered by Flood Re, then any flood claims are paid out of this central pot instead of by the insurer themselves. This means they don’t have to worry about the flood risk and don’t have to adjust their prices for it like they may have done before. The insurer is just charged a fixed amount by Flood Re based on the council tax band of the home, which is often passed on to the customer within their premium. The end result is that consumers in flood risk areas should be able to get cover and at much more reasonable rates than before, even if they are still higher than standard non-flood risk home insurance policies.
The amount charged to insurers to ‘cede’ a policy to Flood Re depends on the tax band and is currently as below:
| Tax band |
England & Scotland | A | B | C | D | E | F | G | H |
| Wales | A B | C | D | E | F | G | H | I | |
| N. Ireland | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Combined | £169 | £169 | £197 | £221 | £265 | £331 | £436 | £1,218 | |
| Buildings | £117 | £117 | £131 | £148 | £176 | £231 | £296 | £812 | |
| Contents | £52 | £52 | £66 | £73 | £89 | £100 | £140 | £406 | |
This amount is not necessarily charged to you as a customer directly in the same way a fee might be, instead it is often wrapped up with the cost of your total insurance premium.
There is also a fixed excess of £250 on any flood claim, which will not be impacted by any voluntary excess that is taken out on other parts of the policy.
Not all insurance providers can offer Flood Re policies, but assuming you have found one then it will depend on meeting a few main criteria:
There are a couple of other points as detailed on the Flood Re website here, but these are the main ones to be aware of.
Look no further! We’re able to provide you with a quote for home insurance through the Flood Re scheme, underwritten by Ageas. You can find more information about our product at this page, and you can click the button below to do a quote online.
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