Up to half a million households in high flood risk areas now have access to affordable flood insurance as Flood Re has officially opened for business. Following the final green light from the Prudential Regulatory Authority (PRA), the world-first scheme is now accepting policies from insurers.
The launch of the Flood Re scheme is the result of the government working closely with the insurance industry to make affordable flood insurance available to households across the UK.
Floods Minister Rory Stewart:
Flooding is devastating. Nothing can take away the distress it causes. But affordable flood insurance will help people get back on their feet more quickly and secure their futures. So the government and the insurance industry have worked together to establish Flood Re to provide affordable excesses and premiums for people in flood effected homes.
It is great news that Flood Re is now open for business. It is fantastic step forward - making flood insurance affordable for people regardless of where they live.
The Flood Re scheme is simple. Customers will buy home insurance as normal but the extra insurance costs associated with a high risk of flooding will be passed on to Flood Re - to be funded by a levy on the insurance industry. Other home insurance customers will not see their bills rise as a result.
Through Flood Re, those living in high risk areas will see their insurance premiums set at affordable levels - according to their council tax band - while the same customers currently face insurance bills totalling thousands of pounds.
Through the Scheme, flood insurance for those at the highest risk of flooding starts at £210 (Council Tax Band A) with the excess charged by Flood Re set at £250.
Flood Re is a success story of how government can work with industry to bring real changes that will benefit hundreds of thousands of households.