Sink or swim? Flood Re regulations update

With flooding permanently hitting the headlines, keeping insurance cover affordable for high-risk properties is a major government issue. Whilst the proposed Flood Re initiative is expected to help millions of homeowners, business owners and landlords will be excluded from the capped insurance scheme and there are concerns that they could see premiums rocket or find securing appropriate cover tougher.

The Flood Re joint initiative between the government and the Association of British Insurers (ABI) is anticipated to go live in April 2016 after its framework setting out affordable cover for the flood element of household property insurance was approved by the House of Lords. It is proposed that flood insurance premiums will be capped at a level based on the council tax band of the property, with lower-risk property owners cross-subsidising those at higher risk of flooding. It’s estimated that this will mean around a £10.50 addition to annual premiums.

Whilst it will be welcomed by many, there are certain exclusions that leave critics saying it doesn’t go far enough. Exclusions include houses built after 1 January 2009, in an aim to discourage development in flood risk areas, as well as business premises or blocks of flats. As buy to let properties will also be classed as business premises, it’s not great news for private landlords either.



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