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Surely, if you live in a flood area & you're worried about flooding you pay the appropriate premium? No one subsidises young drivers when their insurance is unaffordable, whether the car is essential or a luxury.

Perhaps insurers should consider a rating system which increases the rate as more properties are insured in an area? If several insurers applied a system like this then natural competition on rates would see each insurer pick up a relatively even proportion of the risks in an area and nobody would suffer from over-exposure if disaster does strike. I would say this would be good risk management from insurers anyway, leaving them less vulnerable to natural disasters causing huge losses in small(ish) areas.

The idea of a pot of money being collected from lower risks is fundamentally flawed and deeply unfair on policyholders who aren't exposed to flood risks.