A British scheme to make flood insurance more affordable for people at risk in the UK, which some believe could serve as a model for Ireland, has yet to come into effect.
The British government and insurance industry came up with the scheme in 2012 to make insurance easier to afford by shifting the risk of claims away from individual insurers.
Unfortunately for the victims of the latest flooding in Britain, the new scheme, called Flood Re, will not come into effect until April. Even then, a spokeswoman for the Association of British Insurers (ABI) said, it will be up to individual insurers to choose whether or not they want to join it.
“It’s due to come in in April but it won’t change overnight,” she said, adding it could help an estimated 300,000 householders to insure their homes.
Partly funded by a £10.50 annual levy on all household insurance policies, Flood Re is a reinsurance scheme backed by the insurance industry and the government. It is similar in principle to Pool Re, a scheme for insuring commercial property against terrorist attacks introduced after IRA bombings in the 1990s.
Premiums for flood insurance will be capped at between £210 and £540 a year, depending on the value of the property.
It will, however, only apply to private homes and to businesses operated from homes, such as bed and breakfasts and hairdressers.
“The problem identified for householders is much greater,” the ABI spokeswoman said. “There are more options open to businesses. It’s easier for them to shop around.”
Some small business owners disagree, but they are not the only ones affected by flooding to be excluded from Flood Re. The scheme does not apply to properties built after 2009, on the grounds that builders must be discouraged from building on flood plains.
