We all know the devastation that flooding can cause and how insurance is designed to help pick up the pieces – but for some in increasingly flood-prone areas, that security has been financially out of reach.
It was that fact that prompted the set-up of Flood Re back in 2016 as a joint initiative between the UK government and insurers – helping people who would otherwise face significant excess charges to finally gain access to affordable cover. Yet the message doesn’t appear to be getting across quite as much as some would hope.
A BBC report this morning focused on Flood Re’s chief executive, Andy Bord, visiting Cardiff, in Wales, and highlighted that 9,680 homes across Wales had benefited from Flood Re policies. However, in total around 350,000 homes across the UK could benefit – and more awareness about the scheme needs to be raised, he believes.
The concept works by charging a levy on insurance companies in order to form a pool of money that can then be used to subsidise those in high risk areas. That cost typically falls on the average policyholder, who pays out around an additional £10.50 for their home insurance. It has been met with both supporters – who believe it helps reduce crippling excess payments; and detractors, who suggest the money would be better spent on flood mitigation.
The BBC report highlighted the case of Mary Clarke, of the Rhiwbina Community Flood Group – parts of her area were flooded 10 times in the 20 years to 2012.
“My neighbour has lost the entire contents of her house three times, it’s unbelievable,” she said.
She believes that premiums are starting to level off, thanks in part to Flood Re – but also suggests insurance companies should do more to take into account the defences that have been installed in the area.
“You fill in a form and say what your postcode is and they say ‘well you’re red flagged, you’re on a water course’ - and we say ‘yes, but we’ve just spent £1.3 million on a flood defence scheme’,” she told the BBC.
So now we want to know what you think, as insurance professionals, about the Flood Re scheme? Does it go far enough? Would the money be better spent elsewhere? Or is it a step in the right direction? Leave a comment below with your thoughts.
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