Flooding can be a major worry for homeowners in affected areas, as well as pushing up home insurance premiums. Therefore, the news that the Government and insurers have come together to implement a scheme that guarantees affordable flood risk insurance is likely to be welcomed by those living in high-risk areas.
Premiums to be capped
The new scheme, called Flood Re, will subsidise the insurance of homes at risk of flooding - regarded as those which have a greater than one in 75 chance of flooding in any given year. For these properties, the flooding component of the insurance premiums will be capped, depending on the council tax band the property falls into. The cap will be set at £210 for those properties in council tax bands A and B, rising to £540 for those in band G (houses in band H will not be covered by the scheme). [Source: ABI 27.06.13]
A beneficial partnership
The decision has been welcomed by insurers, with Ageas UK chief executive Andy Watson commenting that: “Ageas welcomes the announcement as a first step and is committed to working in partnership with the government and ABI in the best interest of customers. It’s taken a while to get here and there is much more to do but we believe it’s the right decision and together with a commitment to continue investing in flood defences, will support those communities most in need of support.” [Source: Insurance Times 27.06.13]
Reassurance for high-risk homeowners
Environment secretary Owen Paterson added: “Flooding is terrible for anyone affected by it. We have worked extremely hard with the industry to reach an agreement on the future of flood insurance. There are still areas to work through but this announcement means that people no longer need to live in fear of being uninsurable and that those at most risk can get protection, now and in the future.” [Source: Insurance Times 27.06.13]
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