July 2017 – the height of the glorious British summer – and floods have already brought chaos to certain parts of the UK, the southwest in particular.
News reports – including those by the BBC on the 19th of July – illustrated the devastating effects severe weather events may have on people’s homes, whether these are owner occupied or let to tenants.
If such havoc is wreaked during the summer months, winter storms are likely to see still more homes inundated. Are you ready for that risk – and just as importantly, have you arranged suitable flood insurance to meet it?
Problems with flooding
If your property has been hit by flood damage in the past, or if it is situated in an area identified as being at specific risk – for example, a high-risk area determined by the government’s new flood warning service – finding suitable property insurance might prove difficult.
In response to the identified risks of flooding in the future, some insurers might:
- flatly reject your application for property insurance;
- specifically exclude flood risk under the terms of your cover; or
- charge a hefty additional premium for extending such cover to your property.
None of these responses helps the risk to go away, of course, so what recourse do you have in your need for flood insurance?
Reacting to the difficulties faced by many home owners in securing insurance against flooding – and obtaining it at an affordable price – the insurance industry and the government together came up with a solution known as Flood Re.
Introduced in April of 2016, Flood Re is a re-insurance scheme. Participating insurers pay an annual insurance premium into the scheme, to underwrite their losses from the payment of flood claims to their customers. Because insurers are themselves insured in this way, cover may be provided to more customers facing problems with obtaining flood insurance and the premiums charged to those customers are lower.
Because it is a re-insurance scheme for insurers, Flood Re works entirely in the background, with individual home owners having no need for any direct contact with the scheme at all – all their insurance needs, including flood cover and claims, are handled by their chosen insurance company in the normal way.
The success of Flood Re
The scheme has proved an evident success – so much so that the number of homes eligible for cover is to be increased from the 127,000 properties covered since its introduction by a further 50% (to 190,000) during the current year, reported the Financial Times on the 18th of July 2017.
Speaking about the success of the scheme, Flood Re’s Chief Executive revealed four in every five home owners who had suffered flood damage in the past have achieved a reduction of 50% or more in the cost of their home insurance. Not only that, but as the number of insurers participating in the scheme has grown, more home owners are able to find a wider selection of quotes for home insurance when it comes to renewing their cover.
As your next home insurance renewal date draws near, therefore, you might want to contact us here at UKinsuranceNET to take advantage of insurers participating in Flood Re.