If your Household Insurance has been affected by the recent flooding in the UK then you’ll want to know more about ‘Flood RE’. Basically, it was set-up to help home owners affected by flooding and to not penalise them with extortionate premiums caused by a natural disaster, which of course, is out of their control.

We’ve looked further into Flood RE in order to detail what you need to know…

Flood RE

Flood RE is a re-insurance scheme to help support homeowners in the highest flood risks areas in the UK. It is not-for-profit. Its main goal is to give those who live in flood risk areas availability to flood insurance, without a ridiculous premium. The premium will depend on your properties council tax band.

How is it funded?

The costs for Flood RE have (and will continue to) come from many different areas. The set-up costs were put in by the insurance company. Many companies have also spent a lot of money by setting up their own systems. In terms of the claims costs, this will be funded by UK home owners, each seeing a slight increase in their annual Household Insurance premium, in addition to the charge of each policy which is then passed on to Flood RE. If a policy is ‘passed on’ this simply means that insurers will pass the flood risk on to the Flood RE scheme, which will then pay out on any associated claims. There is also reinsurance in place for this particular scheme, so all angles are covered.

Who will benefit from it?

According to figures on the ABI website, it’s estimated that around 350,000 properties will benefit from this type of scheme. It’s quite simple; if the cost of a Flood RE policy is more than a quote for Household Insurance (including flood risk), then there will be no need for someone to take out this specialist scheme. If you live in a flood risk area and you obtain a cheaper quote via Flood RE, only then will it be beneficial for you to partake in the scheme.

There are exclusions…

Be warned – there are some exclusions to this scheme… Homes built after the date of 1st January 2009 will not be eligible for this scheme. Why? Because otherwise this would promote home building in flood risk areas in order to obtain ‘cheaper insurance’.

Want to know more about Flood RE?

You can visit the ABI website which explains everything you’ll need to know in much more detail.

Alternatively, you can also call one of our Household Insurance specialists in order to obtain further information regarding this scheme and / or how it may affect your Household Insurance on 03303331255.

Further Information: Household Insurance