NEWS: Flood Re scheme launches

First announced in 2013, the scheme launches today, aiming to help 350,000 UK homeowners find affordable flood insurance.

Following the significant winter floods of 2015, UK homeowners in some of the worst affected areas have been offered a much needed lifeline as the Flood Re scheme launches today.

The scheme works via Flood Re acting as a reinsurer, with a centralised fund that has been created via a £180 million pound levy distributed across all UK home insurance policies, with UK insurers paying more than £20 million to establish the scheme.

When claims do arise, the insurer can draw from the fund, ensuring no single insurer is bearing the full financial risk. Each house policy in the UK is set to rise by around £10.50 to absorb the cost of the new scheme

The scheme is not available for everyone, with homeowners in high flood risk areas being the most likely to benefit. In addition to this, the scheme does not cover owners of buy-to-let homes, business properties, properties bought after 2009 or flats in leasehold blocks that contain four or more homes.

Flood Re insurance providers

Seventeen insurers are signed up to offer Flood-Re backed insurance on launch, including many of the UK's best-known brands such as Admiral, Aviva, Halifax, More Than and RBS to name a few.

It is anticipated that this number will increase, and the Flood Re website will continue to update the latest participants as they join.

James Dalton, head of general insurance policy at the Association of British Insurers notes:

"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."

Flood Re awareness

Whilst the scheme presents a much needed lifeline for many homeowners in the UK, a report today from Admiral confirms that awareness remains low.

A survey of 1,000 homeowners confirmed that while 67% believed flooding would become more frequent in their area, only 15% had heard of the new scheme and it's benefits.

Insurers advise they will be writing to policyholders in the months ahead to raise awareness.

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