Flood Re home insurance, Dyman & Associates Insurance Group of Companies
Your questions answered
In the summer of 2013 the government and insurance industry came to an agreement about flood-prone homes, to allow owners of such homes to be able to buy affordable insurance. Under a scheme called Flood Re, annual premiums will be capped and payouts for flood damage will come from a central pool of money.
How do I know if my home is affected?
The scheme covers 350,000 households which the Environment Agency says are at high risk of flooding. You can use its interactive map to find out if your home is one of them.
What does this mean for homeowners on flood plains?
Unless your property is in council tax band H then the flood aspect of your buildings insurance will be capped from 2015. The Association of British Insurance says the cap will be £210 a year for properties in bands A and B, rising to £540 a year in band G. The premiums will go in a central fund and be used to pay out claims to any insurer. In theory, some people could see their costs go down once the cap comes.
It is important to remember that the cap is only on the flood element of your insurance – if other risk factors change, your premiums could be pushed up by them.
Insurers will also pay a levy into the fund equivalent to £10.50 a year on every home insurance policy.
Does this mean my premiums will go up?
If you are on a flood plain it could, although you have probably already seen premiums rise to reflect the risk. If you are not on a flood plain insurers say the cost of the levy won't be added to policies as homeowners are already paying some of their premium to subsidise other customers at greater risk of flooding. However, the cost of this year's flooding could mean higher premiums for everyone as insurers attempt to cover their bills.