Not Noah’s Ark – Flood Re
In the wake of the devastation caused by flooding in recent years the Government and the Insurance Industry introduced “Flood Re” on 4th April 2016 to tackle the resultant difficulties for affected properties in obtaining buildings insurance.
The scheme is designed to enable homeowners who are at high risk of flooding to obtain affordable home insurance.
The essence of the scheme is that insurers will pay annually into a central fund, the insurance companies funding this payment by charging a levy on every home insurance policy in the country. If a home owner needs to claim, their insurer will still deal with the claim, but claims due to flooding can be reclaimed by the insurer from the central fund.
When you are buying a new property your solicitor will suggest carrying out a search to establish whether the property is in a flood risk area. It is always advisable to make enquiries about buildings insurance well before exchange of contracts especially for flood risk properties.
However whilst Flood Re may be of comfort to many, buyers do need to be mindful that not all properties will be covered.
The scheme is designed to benefit homeowners rather than businesses. Properties will only be eligible if they meet certain criteria.
Flood Re will not be available for certain types of properties including many “buy-to-let” properties, holiday lets, bed and breakfast premises paying business rates, larger blocks of flats, etc. Properties which have been built since 2009 are also not eligible. This is not exhaustive list.
Although flooding seems a circumstance that will keep happening, the scheme should remove some of the worry for many about finding insurance and premiums for eligible properties should be reduced because insurers are no longer bearing the flood element of the risk.
However buyers and property owners need to be aware of the Flood Re’s eligibility limitations.
Photo by HowardLake 
