Flood Re

Key takeaways

• Flood Re is a government-backed insurance scheme set up to help people in high-risk flood areas obtain more affordable home insurance

• Before Flood Re was in place, many homeowners living in areas prone to flooding struggled to find affordable home insurance with flood cover 

• Flood Re is planned to be in place until 2039

What is the Flood Re scheme? 

Flood Re is a flood re-insurance scheme (hence the ‘Re’ part of its name), which means it enables insurance companies to insure themselves against losses because of flooding.  

Unlike other reinsurance companies Flood Re is a publicly accountable not-for-profit fund. It is owned and managed by the insurance industry, and it has been designed to address a specific issue for a specific period. Flood Re is funded by the insurance providers themselves – all UK home insurance providers pay into the Flood Re fund.  

What is flood insurance? 

Flood insurance is normally included as part of home insurance policies for residential properties. It provides cover for costs resulting from flood damage from causes such as heavy rain, overflowing rivers or surface water.   

Buildings insurance covers flood damage to the structure of the property, while a contents policy covers the loss of or damage to your home’s contents and your belongings. 

According to the Environment Agency (the part of the government that deals with flooding), about 5.2 million properties in England, or one in six properties, are at risk of flooding.

How does Flood Re work? 

Flood Re works behind the scenes when you buy home insurance. If you live in a property at a high risk of flooding, your insurer may place that part of the policy with Flood Re. 

A flood claim is expensive for insurers, with claims often costing tens of thousands of pounds. This means if your property is prone to flooding, insurance premiums are likely to cost more as your home presents a higher risk. 

In some areas, home insurance became too expensive for many people to buy, or they couldn’t find cover at all. So Flood Re was set up by the government and insurance industry to help people in these areas buy affordable flood insurance. 

For homeowners, there is no difference to the way you buy a policy or make an insurance claim when your policy is backed by Flood Re. 

If you live in a flood-prone area you still buy home buildings and/or contents cover directly from insurers, price comparison websites or insurance brokers.

Insurers are solely responsible for setting the price householders pay for their cover and will take into account the premium paid to Flood Re when setting prices. 

If you make a home insurance claim because of a flood, the claim will be managed and repair works completed by your insurer in the usual way, but your insurer will then be able to recover the costs from Flood Re. 

Who is eligible for Flood Re? 

If your home is in a flood risk area, you might be eligible for Flood Re. 

To qualify for the Flood Re scheme, you will need to meet all the following criteria: 

• The insurance policy must be in your name (or your personal representative or in a trust for you) 

• You (or your family) must live in the property for some or all of the time, for residential purposes, or the property must be unoccupied 

• The property must be in a council tax band between A and H 

• Your home must be a single residential unit or in a block comprising of two or three residential units 

• The property must have been built before 1 January 2009 and be in England, Wales, Scotland or Northern Ireland (but not the Isle of Man or the Channel Islands) 

You can use Flood Re if you are a private tenant or leaseholder, even in a larger block of four or more flats, and are just buying contents (not buildings) insurance. You can also use it if you live in a non-standard property. 

You can check on the Flood Re website if your property is eligible. 

Who is not eligible for Flood Re? 

Properties excluded from Flood Re include:

• businesses

• commercial property

• properties used as businesses (e.g. buy-to-let properties, guest houses and B&Bs)

• housing association properties

• farms,

• static caravans used as holiday accommodation. 

Other exclusions include properties built on or after 1 January 2009, so that the scheme doesn’t incentivise further house building in areas of high flood risk 

How do I find out if my home is high risk for flooding? 

Causes of flooding might be rivers and the sea, surface water, reservoirs or groundwater. 

Can Flood Re help tenants? 

Yes, Flood Re can help tenants, and also leaseholders. 

As a tenant or leaseholder, you only need contents insurance (as your landlord or freeholder is responsible for buildings insurance). 

Flood Re will cover a tenant's / leaseholder’s contents in rented or leasehold properties even where the building itself would not be eligible (for example, a large block of flats), assuming all other eligibility criteria are met. 

Which insurers are taking part in Flood Re? 

More than 50 insurers are signed up to Flood Re.  

These include: 

• banks such as Barclays, Bank of Scotland, NatWest and Santander 

• building societies such as Nationwide, Yorkshire Building Society, and Nottingham Building Society 

• insurance companies such as Churchill, Aviva, Axa, Admiral and LV= 

You can find a list of insurers taking part in Flood Re on the Flood Re website.  

However, it’s up to each insurance company as to whether they will cover a particular property and if they will use Flood Re. It’s also up to the insurer to set premiums for your policy, not Flood Re. 

Does Flood Re save people money? 

Yes, Flood Re can save people money as it means those who live in flood prone areas have access to affordable home insurance. Without the scheme, premiums would be much higher. 

As always with insurance, you can save money on home insurance by shopping around for the best policy to meet your needs.  You may be able to reduce the cost of home insurance by: 

• increasing the excess on your policy 

• building a no claims bonus 

• installing home security devices 

• buying buildings and contents insurance as a joint policy