Homeowners such as John Bowden, of West Huntspill, Somerset, have been left staggered by the hike in their home contents insurance premiums this year – which insurers say is due to his property being deemed a high flood risk. However, Mr Bowden told the Bridgewater Mercury that as the area he lives in hasn’t flooded for 35 years, this seems overly cautious on the part of the insurance company. Considering that his home contents insurance quote rose form £220.18 to a staggering £6,144.42 in just one year, it’s unsurprising that Mr Bowden decided to look around for a better deal.
Fortunately, Mr Bowden was able to obtain a quote of under £220 from a local insurer, but he’s not alone. The Daily Express reports that residents in Leicestershire have also faced similar price hikes. But why is this occurring? It’s believed that policies are increasingly being altered as a response to flood damage claims in recent years, but fortunately a new scheme designed to make flood insurance affordable to all is expected to be introduced next year.
Help is on the way for homeowners in high flood risk areas
The scheme, called Flood Re, is subsidised by the Government and the Association of British Insurers, and has the aim of ensuring that flood risk insurance is both affordable and available to those who require it. It will offer cover at a set price to people whose homes might otherwise have been uninsurable.
By promising to reimburse insurers for the cost of payouts due to flooding, Flood Re aims to increase the incentive for insurance companies to cover higher flood risk areas. The plan will see that insurers sell insurance in the normal way with an incentive to compete for the business of customers with high flood risk because they know they can pass the flood element of the policy into the scheme.
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