11 July 2016
Flood Re – What you need to know
Flood Re has seen a surge in UK Household insurers signing up to the scheme since its launch three months ago, which is good news for home owners eligible for the scheme.
Not only will they find it easier to source an insurer willing to insure their property, but will also enjoy more competitive premiums for this element of cover as a result.
Many home owners and managing agents may not be aware of the scheme and how it can benefit them. Here’s what you need to know:
What is Flood Re?
Flood Re is a joint industry/government-sponsored reinsurance fund owned by the UK insurance industry. The scheme is open to all UK household insurers (although not all have opted to join the scheme at this stage) and it provides them with an opportunity to purchase reinsurance for the flood element of an insurance policy. With insurers being able to pass the flood risk onto Flood Re they can in theory widen their appetite for such properties, thereby increasing the choice of insurer for customers who need to consider flood risk as part of their insurance cover.
How does it work?
The scheme is funded by a levy, which is compulsory for all insurers. Insurers and Lloyds managing agents using the scheme will determine the premium using property tax data. In short:
– Each UK home insurer is charged an annual tax
– That tax contributes £180m to a fund managed by the government
– Insurers can choose whether to pass on the flood risk part of your policy to Flood Re
– If you need to make a claim on your insurance, the insurer will be reimbursed for it under the Flood Re scheme.
What does this mean for property owners?
It is not just homes built near a river or by the sea which are at risk of flooding. Many homes are potentially at risk of flash flooding, so it’s important to have an insurance policy that covers these risks. Flood Re makes it easier to get adequate flood insurance cover at more competitive prices. This means a home-owner living in an area with a severe risk of flooding will now be able to access flood cover, which may not have previously been available to them, or not available at a competitive premium.
You can access Flood Re through Centor and our panel of insurers who have signed up to the scheme. While Flood Re will cover the costs if you need to make a flood claim, you can be reassured that you will only ever deal directly with us your broker or directly with your insurance company, when processing claims.
Visit the Flood Re website to find out whether your home is covered, or speak to your Centor contact.