Scheme may help cut insurance costs for homes in flood-hit areas
HOUSEHOLDS in flood-prone areas could see their insurance costs reduced from next year, according to a scheme which helps to make affordable cover more widely available.
The Flood Re scheme, which was launched in 2016, said it will cut the charges it makes to insurers - which in turn could make cover cheaper for households.
The scheme does not deal directly with households but sits in the background for insurers to make use of.
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.
The scheme will then reimburse the insurer if they need to pay out on a claim.
The scheme has announced it will reduce the reinsurance premiums it charges to insurers from January 1 2019. It said: “The decision is anticipated to reduce the costs of flood insurance cover for people most at-risk of flooding in the UK.”
However, Flood Re does not set the prices paid by households, and it said that is a decision for insurers to make.