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Flood Re or Flood Excess?

Want to know which flood insurance is best for you?

Flood Re was launched on 4th April 2016 to help assist homeowners in the highest risk flood areas. The scheme allows Insurer’s to transfer the flood risk element of a home insurance policy into Flood Re for a premium that is subsidised by a levy on insurers of £180 million. It is estimated that over time, Flood Re could help around 350,000 homeowners.

After 25 years, the Flood Re scheme will end and there should be a free market where you will be able to find flood insurance with most insurers. There will be a review at least every 5 years to assess Flood Re’s progress in managing a transition to this free market, which may consider the premium charged for each policy and the surcharge charged by Flood Re to UK home insurers.

Flood Excess Insurance is a product designed to assist not only homeowners, but commercial property owners and landlords alike by providing an insurance policy for any flood excess imposed by insurers, up to a maximum of £50,000.

How do they Work?

There are a few differences between both of the insurance products. The Flood Re insurance scheme allows insurers to sign over any flood risk elements of a home insurance policy to the scheme. Flood Excess Insurance is a stand-alone insurance policy allowing homeowners, commercial property owners or landlords to insure their flood insurance excess amount up to £50,000.

How are they accessed?

Flood Re does not sell directly to the homeowner, the homeowner will buy insurance in the normal manner and the insurer will cede the flood risk element of the policy into Flood Re. Not all Insurers are ceding policies into Flood Re though. For Flood Excess homeowners, landlords and commercial property owners can access their product via their broker. *Both Insurance Schemes can be accessed by the help of your broker.

Is there an excess in the event of a flood claim?

Flood Re will charge the insurer a £250 excess, whereas Flood Excess has none.

Are any property types excluded?

In Flood Re, properties that are excluded are commercial properties, certain Landlord property types and any properties built after 2009. On the other hand, for Flood Excess, all property types can be considered, provided there have been no more than two flood claims in the previous 5 years.

 

If you want any advice on which scheme would best suit your needs or if you have some questions, don’t hesitate to contact us for further information on 01622 815 011 or info@lion-insurance.com

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