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Flooding and your home insurance

It never rains but it pours – there’s probably no more English an expression than that. The trouble is that, when it pours, the risk of flooding in your home rises exponentially. Indeed, the problem of flooding is so widespread that the National Flood Forum, estimates that a population of more than 5 million, or one in six people, are at risk of the effects of flooding which creates real issues when obtaining flooding insurance.

Naturally, flooding of homes and the impact on their contents causes considerable damage. The nationwide storms and resulting floods in 2012, for instance, prompted some £400 million in insurance claims, says the Association of British Insurers (ABI).

But floods may strike at any time and, as recently as the 23rd of June 2016, the ABI was issuing warnings to homeowners about the need to contact their insurers as soon as possible after any incident.

Flooding insurance

Against this background, it is hardly surprising that many insurers are extremely wary about extending flood cover in their home building and contents policies. Those that are prepared still to offer the cover, consider past claims, anticipate the worst, and increase the price of premiums accordingly.

As a result, cost effective flood insurance may have become increasingly difficult to arrange.

Flood Re

That is why the government and insurers have been working together to launch a scheme this year to help spread the cost of insurance against the risks of homes damaged by flooding. The scheme is known as Flood Re and is expected to be in place until at least 2039.

Here at GSI Insurance, we have thrown our full weight behind the scheme and are pleased to be cooperating with participating insurers to help ease the impact of flooding and the homeowner’s access to competitively priced flood insurance.

How does it work?

The scheme works by way of a tax collected from insurers and administered centrally by Flood Re, which in return accepts the flood risk element of home insurance policies written by those insurers. As an insured homeowner, you continue to make any flood claim to your insurer in the normal manner and Flood Re arranges reimbursement to the insurer.

In other words, the scheme works entirely in the background, without the homeowner noticing any difference in the way claims are made or any knowledge of the involvement of Flood Re.

The scheme is expected to raise some £180 million from the taxes collected from insurers and this is intended to help as many as 350,000 households have access to affordably priced home building and contents insurance.


In order to benefit from the more affordable flooding insurance policies backed by Flood Re, insurers are able to offer cover on certain grounds for eligibility:

  • the property is a residential dwelling;
  • it is occupied by the policyholder or close family members for at least part of the year or is currently unoccupied;
  • the Council Tax band on the property is in one of the classes A to H;
  • the insured property was initially built before the 1st of January 2009 (but may have been rebuilt since then); and
  • the property is within the mainland UK – the Channel Islands and the Isle of Man are excluded.

Thanks to Flood Re, therefore, many more homes which are vulnerable to the risk of flooding have the opportunity of being appropriately and economically insured against that risk and get affordable flooding insurance

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