The National Flood Forum is hopeful the new Flood Re insurance scheme will alleviate the stress and frustration previously felt by flood-hit homeowners in Greater Manchester.
As the only charity that focusses solely on flooding, the National Flood Forum has been working with government and the insurance industry for many years to get a better deal for homeowners. The state-backed initiative is set to launch on 4 April 2016 and aims to help flood-risk households obtain affordable insurance.
Paul Cobbing, Chief Executive of the National Flood Forum said: “Thousands of homeowners and residents currently struggle to get buildings and contents insurance which creates anxiety, stress and frustration. It is hoped that Flood Re will be the game changer that enables more people to take out affordable insurance to protect their homes and provide peace of mind.”
It is expected that the vast majority of insurance providers will sign up to the scheme which should create a more competitive market for consumers to shop around in.
Paul continued: “Until now, many people in flood-risk areas either couldn’t obtain or afford insurance and insurers haven’t been able to offer affordable policies in flood risk areas, as the number of flooding incidents and size of claims increased. Through Flood Re, insurers will now be able to change all that.
“Flood Re is time limited to 25 years after which flood insurance will return to the free market. Therefore, it is critically important that we use this opportunity to radically reduce flood risk to communities across the country.
“Our level of ambition needs to increase significantly, with roles for all parts of society including Government and the insurance industry. It is a critical time for government and all stakeholders with an interest in flood risk management to work together to devise and deliver a much more robust, collaborative and ambitious plan for managing flood risk. Whatever the approach it must serve to lessen the impact and reduce the huge cost of flooding to individuals and the public purse.”
Flood Re works behind the scenes; people will continue to deal with their insurance companies in exactly the same way as before. They will not need to contact Flood Re. To ensure sufficient funds are available, all domestic property insurers operating in the UK will pay a statutory levy. This will be a total of £180m across all insurers. In addition, all household insurance policies will pay a small fee that will be passed to Flood Re. Policy holders can expect to see the flooding part of their excess capped at £250 and a more competitive market will drive down policy premiums too.
Paul said: “We will be keeping a close eye to see how effectively the scheme performs but we are really hopeful that it will make a big difference to people’s ability to shop around for the best deal for them. However, in order for the scheme to work most effectively, it is important that people shop around.
“We are aware however, that there is still work to be done in other areas of insurance, particularly around small businesses who are not covered by Flood Re but who still struggle to find affordable cover. Whilst we fully recognise this doesn’t fall under Flood Re’s remit, we will continue to push for changes to be made so that all those affected by flooding have a fair chance of getting insurance.”
For more information about Flood Re please visit www.nationalfloodforum.org.uk/flood-re or www.floodre.co.uk
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