Households in flood-prone areas ‘could see insurance costs fall in 2019’
Households in flood-prone areas could see their insurance costs fall from 2019, according to a scheme which helps to make affordable cover more widely available.
The Flood Re scheme has previously announced that it will cut the charges it imposes on insurers from 2019 – which in turn could make cover cheaper for households.
The scheme, which launched in 2016, does not deal directly with households, but works with insurance providers.
When households buy home insurance cover, insurers can choose to pass the flood risk element of the policy to Flood Re for a fixed price.
Insurers will then be reimbursed by the scheme if they need to pay out on a claim.
The scheme said in October that it would reduce the reinsurance premiums it charges to insurers from January 1 2019.
However, Flood Re does not set the prices paid by households, and said that is a decision for insurers to make.
It said the changes, in line with its purpose of making flood cover more affordable, could mean a potential reduction of up to £112 for a combined buildings and contents policy.
A home insurance industry levy helps to pay the running costs of Flood Re.
The scheme previously said that over the first two years in operation, it has established a strong financial position and at a time when home insurance premiums have been flat or falling slightly.
Andy Bord, chief executive of Flood Re, said: “Our purpose is to make home insurance both more affordable and more available for those people living in high flood-risk areas.
“I am delighted to start the new year by making home insurance more affordable for those most at risk of flooding.
“More than 200,000 properties have benefited from Flood Re since it was launched and these reductions will help even more people to protect their homes and possessions.
“Our consultation with the insurance industry suggests that these changes could save their customers as much as £112 a year on their home insurance.
“Householders should always shop around to get the right deal for them.”