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New flood insurance scheme – Flood Re – launched

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The new scheme has been designed to help people who live in flood risk areas get affordable home insurance
New flood insurance scheme – Flood Re – launched

A brand new flood insurance scheme has launched today – Flood Re – designed to help UK homeowners get affordable insurance cover, even if they live in areas at risk of flooding.

Today’s long awaited launch of Flood Re represents the introduction of a scheme that’s the first of its kind in the world. Flood Re is not a home insurer itself but will work behind the scenes with existing insurance companies so that people who own and live in homes that are most likely to flood can shop around more easily to find policies with affordable premiums and excesses.

Over time it’s estimated that at least 350,000 homes could benefit from the scheme, although awareness is lacking according to one firm. Research published today by home insurance company Admiral suggests more needs to be done to educate those affected, as only one in seven of us have heard of the scheme.

However, 17 insurers have already signed up to use Flood Re, with more expected to follow.

James Dalton, director of general insurance policy at the ABI, said: “It’s great to see so many insurers ready to make use of Flood Re from launch. Monday is just the start of a process and we know more providers will join them over time, bringing even more choice for people with homes at risk of flooding.

“Insurance is an essential safeguard for your home and belongings. People in flood risk areas not being able to access affordable cover was a major concern, and why the insurance industry went to great lengths to design and create this world-first solution along with Government.”

The ABI has published a list of top tips for homeowners to consider if their property is at risk of flooding:

Don’t feel pressured to do anything in a hurry

There’s no rush to take action on April 4th. The benefits of Flood Re will develop over time so if your policy isn’t due for renewal yet, you may find an even greater choice of cover when you are ready to renew in a few months’ time.

Work out if Flood Re is relevant to you

Whether you benefit will depend on if you live in a flood risk area, and even then it will depend on how much you pay for the flooding part of your home insurance. A lot of people who live in a high flood risk area will already be aware of it, but there are also online flood risk maps available for England, Wales and Scotland, and your insurer or insurance broker will be able to tell you if your property is judged at risk.

Of the eligible households in the UK we expect, over time, around 350,000 to benefit from the effects of Flood Re, although there is no cap. That’s about 2% of eligible households.

Speak to your current insurer

It’s always worth making sure you understand what your current insurance policy covers you for and how much you’re paying for it, and you might want to ask your insurer if they can offer you more options after April 4th. Some insurers will be contacting customers directly to tell them about how Flood Re could make a difference to them.

Shop around to see what else is available

It’s a good idea to shop around for insurance products to make sure you have the policy that best suits your needs – remember not to focus purely on price but look at the cover offered as well. Over time, Flood Re should mean that people with properties at risk of flooding have a greater choice of cover as a market develops fully. Comparison websites generally suit people with standard needs so finding cover for a property with a flood risk may be best done by dealing directly with an insurer.

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