Flood Re

Thanks to a scheme called Flood Re, you can now access affordable insurance even if you live in a high-risk flood area. Here’s what you need to know about it.

Thanks to a scheme called Flood Re, you can now access affordable insurance even if you live in a high-risk flood area. Here’s what you need to know about it.

Chris King
From the Home team
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Posted 22 NOVEMBER 2021

What is Flood Re?

Flood Re is a scheme that was created in 2016 so that homeowners in high-risk flood areas could access affordable home contents and buildings insurance. An estimated 350,000 UK households could benefit from the scheme.

How does Flood Re work?

We need to talk about reinsurance here, because that’s what the ‘Re’ in Flood Re stands for. All insurance providers take risks by insuring us – after all, when they take on a customer, they don’t know how much they’ll end up paying out. 

When a customer looks risky – for instance, if they live in an area that’s prone to flooding – the insurance provider can refuse to take them on. Or they can sell that risk on to another insurance provider. This is called reinsurance. 

To put it simply, reinsurers insure insurance providers.

Flood Re doesn’t affect you in that you’ll still deal with your insurance provider in the same way you always have. But behind the scenes, your insurance provider is paying the Flood Re part of your insurance premium. 

How Flood Re works is that every UK insurance provider has to pay into the scheme. This creates a £180 million pot that’s then used to cover flooding claims. It means that when you buy your home insurance, your insurance provider can get reinsurance from Flood Re. That way, if your home floods, your insurance provider can claim the money they pay you from the Flood Re fund. 

In some ways, Flood Re is no different from any other reinsurance company. It receives premiums from insurance providers and pays back their claims. But there’s one big difference. Without Flood Re, insurance providers probably wouldn’t insure people living in flood zones, leaving many people without cover. That’s why the government stepped in and worked with the insurance industry to set up Flood Re as a not-for-profit scheme. As a result, many households pay far less for their home insurance than they would otherwise have to.

How is Flood Re funded? 

Flood Re is funded by the insurance providers themselves. If you’re a UK home insurance provider, you’re obliged to pay into the Flood Re pot. This makes things fair. It also means that Flood Re has £180 million from which to pay flooding claims.

Am I eligible for Flood Re? 

If your home is in a flood-risk area, you might have been told that you won’t get insurance. However, don’t give up hope – your home may be eligible for Flood Re. To qualify, the property must: 

  • be in a council tax band
  • have been built before January 2009
  • be used for residential purposes. 

Also, you or your immediate family must live in the property some or all of the time. And your insurance policy must be in your name. 

Still not sure if you’re eligible? You can check if you qualify using Flood Re’s handy tool.

Who isn’t eligible for Flood Re? 

Some buildings aren’t eligible for Flood Re – usually those used as businesses, rather than homes. Examples of buildings that wouldn’t qualify include: 

  • buy-to-let properties that don’t meet the above criteria
  • guest houses and B&Bs that pay business rates
  • housing association properties
  • farm buildings
  • static caravans used as holiday lets

How does Flood Re help homeowners?

  • Flood Re allows insurance providers to offer you more competitive prices
  • It means you don’t have to worry about getting cover if you live on a flood plain

How does Flood Re help tenants?

If you rent a home in a flood-risk area, your home contents insurance policy could be backed by Flood Re. But you should check that your landlord has insurance cover in place, because most landlord policies offer help towards rehousing costs.

Which insurance providers take part in Flood Re? 

Lots of insurance providers take part in the scheme. These include: 

John Lewis Home Insurance
Legal & General
M&S Bank

Correct as of November 2021. 

As always, it pays to shop around to see who can provide the right policy for you.

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