A Guide to the Flood Re Scheme
The Flood Re scheme isn't available to all homeowners, to be eligible your property must be:
- The property is currently covered by an insurance contract which is held in the name of, (or on trust for) one or more individuals or by the personal representative of an individual.
- The policy holder, or their immediate family, must live in the property for some or all of the time (this can be with other people) or the property must be unoccupied.
- The property must have a domestic Council Tax Band A to H (or equivalent).
- The property must be used for private, residential purposes.
- The property must be a single residential unit or a building comprising of two or three residential units.
- The property must be insured on an individual basis or have an individual premium, it cannot be part of a policy which includes a number of other properties as well.
- The property must be built before 1st January 2009 (if a home is built before 1stJanuary 2009 but then demolished and rebuilt, the new home will however still be eligible).
- The property must be located within the UK specifically being: England, Wales, Scotland and Northern Ireland (excluding the Isle of Man and the Channel Islands)
- Bed and breakfasts paying Council Tax and insured under a home insurance contract.
- Farmhouses dwellings and cottages. Where farmhouse dwellings are included in as part of a commercial lines insurance policy, as long as the insurer can split out the dwelling element (and that this meets the criteria 1-8 (inclusive) above), the dwelling part of the risk can be ceded to Flood Re.
- Holiday homes/Second Homes.
- Properties occupied by home workers.
- Individual leaseholders protecting their own property/flat.
- Leasehold blocks if they contain 3 units or fewer and the freeholder(s) lives in one of the units to be insured.
- Single unit leasehold properties where the leaseholder insures the structure of the property.
- Residential "buy to let" properties.
- Static Caravans/homes if in personal ownership
Insurers don't automatically have to be a part of the Flood Re scheme, however many of them are. There's not a publically available list of all insurers that do subscribe to Flood Re however, a list of some of the insurers participating in the scheme can be found on the Flood Re website.
No, if an insurer is part of the Flood Re scheme it doesn't necessarily mean that the they will include your property in the Flood Re scheme.
This will be based on their view of how likely your home is to flood. The more likely they think your home is to flood the more likely they are to include you in the Flood Re scheme. Insurers are likely to have different views on this.
Yes, you will as long as your property meets the eligibility criteria.
This depends on whether you meet the eligibility criteria, whether your insurer is part of the Flood Re scheme and whether or not they decide to pass on the flood risk to Flood Re.
The Flood Re scheme is paid for in two ways:
- A tax/levy paid by all home insurers in the UK.
- An amount paid by all policyholders who's properties are included in the Flood Re scheme.
You can find out your council tax band at: http://cti.voa.gov.uk/cti/InitS.asp?lcn=0
If your insurer decides not to include you in the Flood Re scheme they will set their own charge for offering you flood cover and include this within the overall cost for all other cover such as theft, fire etc. If your insurer doesn't include your property in the Flood Re scheme. It is unlikely that if you are eligible for Flood Re and your insurer chooses not to include you in it that your flood insurance premium will cost you less that if it your home was included in the Flood Re scheme.
The premium charged by your insurer for all other insurance cover other than flood will be set by your insurer in exactly the same way as it is now, the cost of this cover will be added to the cost of your Flood Re premium.
Research published by Flood Re has highlighted that on average households are able to save around 50% in comparison to their premiums prior to the schemes introduction. Some properties in very high flood risk areas or that have had several flood claims may have been virtually uninsurable before the launch of Flood Re, in fact many people chose to 'self-insure' i.e. pay for the cost of damage caused by a flood themselves.
Yes, they will but not in the short term. Flood Re has set the current levies for a 5-year period (until 2020) after which time the levies will be reviewed and adjusted according to the cost of running and maintaining the scheme. It's important to remember that Flood Re is a non-profit making scheme and the levies will always be set to minimise the cost to homeowners.
If your home is covered under the Flood Re scheme and you make a flood claim, you will also benefit from a low flood excess. The current Flood Re excess is £250 which is significantly lower than many of the policy excesses faced by household prior to the schemes launch.
If your insurer doesn't cede you in the Flood Re scheme your flood insurance excess will vary, ask your insurer or broker to confirm this amount to you, it should also be stated in your policy documentation.
The excess you pay for any other type of insurance claim you make under your policy will be the standard amount that your insurer would typically charge.
If you need to make a flood insurance claim you'll do this in exactly the same way as you would do for any other type of claim. Flood Re won't actually get involved in the handling or payment of your claim directly, this will all be done by your insurer. Once your insurer has settled your claim they will look to re-coup these costs from Flood Re.