Band H properties still excluded from affordable flood insurance scheme

The government will include certain leasehold properties and micro SMES with domestic policies in Flood Re.

However, properties in council tax band H will still be excluded despite pressure from associations and Lloyd’s insurer Hiscox.

The government has outlined the inclusions and exclusions in a new document titled Scope of Flood Re.

The affordable flood insurance scheme, due to launch in summer 2015, excludes commercial properties, residential properties in band H and houses build after 2009.

Leasehold inclusion

The government has clarified that some leaseholders will be included in Flood Re, provided that the owner or their immediate family lives in the property and purchases the buildings insurance in their own name.

Buildings with three flats or fewer, such as maisonettes or converted houses, will also be included as long as the freeholder lives in one of the units or the insurance is bought by one of the leaseholders that has a share of the freehold.

Leaseholders in larger blocks will be excluded from Flood Re because freeholders will  be responsible for buying buildings insurance for their leaseholders.

Micro-SME cover

Small businesses in general will still be excluded from Flood Re. However, the government has clarified that certain micro-businesses that operate from domestic premises and hold a policy that is classified as domestic by the insurance industry will be included in the scheme.

For example, a home that is used by the occupant for work, but is not the registered business address, would be included in the scheme.

The government stressed that the duration of the hours worked from home do not affect  eligibility for Flood Re. The type of policy held determines whether the property is included or not.