Under the proposals, claims payouts will include additional funds to help policyholders ‘build back better’ following flood damage

The Department for Environment, Food and Rural Affairs (DEFRA) has today launched a consultation proposing measures to “improve the efficiency and effectiveness” of the joint government and industry Flood Re scheme, in order to “to accelerate uptake of property flood resilience measures”.

Flood Re, which launched in 2016, aims to reduce the insurance costs associated with flood-prone areas by taking on the flood risk element of home insurance and charging a set premium to households based on council tax bands.

To date, more than 300,000 households have benefitted from Flood Re, with four out of five households with prior flood claims seeing their insurance premiums drop by more than half.

Today’s consultation will explore:

  • The ability for Flood Re to offer discounted premiums to households that have fitted property flood resilience measures, such as airbrick covers or non-return valves.
  • Permitting the payment of claims to include an additional amount to enable policyholders to build back better, in a more flood resilient way.
  • Whether there’s more the Flood Re scheme could do to accelerate the uptake of property flood resilience (PFR) measures, including whether the scheme’s currently available funding could contribute.
  • Whether Flood Re premiums should be further reduced.
  • Technical changes to improve the scheme’s efficiency.

The consultation is also considering whether the cheapest subsidised premium for contents insurance provided by Flood Re (£52) should be further reduced – this follows evidence published by Aviva chief executive Amanda Blanc, who led the government’s independent review of flood insurance in Doncaster last year. Her findings show that these premiums could still be too high for low-income households.

A spokesperson for the ABI said on the consultation: “We welcome this consultation. Insurers are at the forefront of helping people recover from the trauma and destruction of flooding, from making emergency payments, arranging temporary alternative accommodation, to organising the drying out and repairs. As part of this process, many insurers already work closely with their policyholders on flood resilience measures that can help reduce the flood risk.

“An adequate, sustained and targeted flood defence investment programme, including maintenance of existing defences, is essential in ensuring our flood risk communities get the protection they deserve.

“We will be studying these proposals carefully and feeding back into the consultation in order that we are best placed to minimise and manage the flood threat.”

Call for evidence

The consultation also includes a call for evidence, as the government seeks to explore how the UK can strengthen its flood and coastal defence investment programme, “through better assessment of local circumstances, including how potential changes to the funding formula could provide further benefit to frequently flooded communities”.

Furthermore, the consultation will look at how the government can help increase the uptake of property flood resilience measures to enable both households and businesses to better prepare for flooding.

This ties in with the government’s £52bn investment into flood protection, published last July, which aims to “create around 2,000 new flood and coastal defences to better protect 336,000 properties in England by 2027”.

Speaking on the consultation, floods minister Rebecca Pow said: “During Storm Christoph, 49,000 properties were protected by our defences. I recognise that this is of little comfort to those who have been flooded and that there is more to do.

“The plans will give people in flood-hit areas more help to build back better and reduce the risk to homeowners in the future.

“Combined with a record £5.2bn government investment over the next six years in new flood and coast defences, hundreds of thousands [of] properties will be better protected.”

Environment secretary George Eustice added: “My thoughts are with all of those affected by Storms Bella and Christoph.

“In Northwich last week, I saw for myself the impact that flooding has on homes, businesses and communities. I am determined to get more support to people hit time and again by floods.

“These plans aim to give households in flood-hit areas additional support to protect their properties.”