The latest new thinking from Flood Re;
As Flood Re marks its tenth anniversary, the Scheme announces a package of reforms designed to ensure that flood insurance remains fair, affordable and sustainable, whilst accelerating action to improve flood resilience across the UK.
A central part of today’s announcement is a significant reduction in the premium that Flood Re charges insurers for contents-only policies in Council Tax Bands A and B, helping ensure that support is focused on those households least able to bear the financial consequences of flooding.
Flood Re will more than halve the premium that it charges insurers for those policies, reducing it from £52 to £25 from April 2027. The change is intended to support lower-income households and renters, with insurers expected to pass on the savings to customers.
Since launching in 2016, Flood Re has helped transform access to flood insurance, ensuring that households at the highest risk of flooding can obtain affordable cover. Over the past decade, over 742,000 households have benefited from the Scheme, helping families recover from flooding and providing confidence to homeowners, buyers and lenders in flood-prone areas.
However, with climate change increasing the frequency and severity of flooding, rising costs, and with fewer than fifteen years remaining until the Scheme is due to end in 2039, Flood Re today set out how it will evolve to meet the challenges of the future.
The reforms, announced alongside the Department for Environment, Food and Rural Affairs (Defra), will focus support more effectively on those who need it most. The measures outlined below look towards the next phase, focused on strengthening incentives for property-level resilience and helping create a smoother transition towards a sustainable flood insurance market.
Better targeted support
These changes are being made to ensure that support is better aligned with the Scheme’s original purpose: to provide reinsurance to promote affordability and availability of insurance for UK households at high flood risk.
Due to rising costs in three of the last four years, Flood Re has spent more repairing homes in Bands G and H (less than 4% of UK homes) than in repairing homes in Bands A & B (around 45% of UK homes).
The reduction in premiums for contents-only policies in Council Tax Bands A and B is the first step in that process, ensuring that the scheme continues to protect affordability for those who need it most.
The Government has also confirmed its intention to work with Flood Re and the insurance industry to reform the Scheme’s premium structure and claims arrangements, ensuring that support fairer, more targeted and sustainable over the long term.
Rethinking resilience
At the heart of Flood Re’s next chapter is a new focus on resilience.
Working with insurers, lenders and industry partners, Flood Re will develop and pilot new Flood Performance Certificates (FPCs) to provide a trusted assessment of a property’s flood resilience.
Similar to Energy Performance Certificates, FPCs will help homeowners better understand and manage their flood risk whilst supporting insurance pricing that recognises investments in resilience measures.
Flood Re will also introduce premium discounts for households that obtain an FPC or complete an equivalent self-assessment, helping reward those who take practical steps to protect their homes.
Resilient reconstruction should become the norm following a flood, which is why the Scheme is further strengthening its Build Back Better programme.
This will be achieved through incentivising insurers to offer it to households affected by floods, with a lower cap on claims when the scheme is not offered. The programme provides up to £10,000 of property resilience measures as part of flood repairs to help households recover stronger and more resilient than before.
Bridget Rosewell, Chair of Flood Re, said:
“For ten years, Flood Re has helped ensure that households at greatest risk of flooding can access affordable insurance and the peace of mind that comes with it. That is an achievement everyone involved in the scheme can be proud of.
“As we look ahead, it is vital that support remains focused on those who need it most. That is why we are announcing today that we will more than halve the premium we charge for contents-only policies in Council Tax Bands A and B – helping reduce costs for lower-income households and renters, while ensuring protection remains accessible.
“At the same time, climate change means we must go further than affordability alone. Through measures such as Flood Performance Certificates and Build Back Better, we are helping households become more resilient before flooding happens – supporting a stronger, more sustainable flood insurance market for the future.”
Floods Minister Emma Hardy MP said:
“Flooding is truly devastating, turning lives upside down and leaving families facing enormous uncertainty – making access to affordable insurance even more vital.
“Over the past decade, Flood Re has transformed that access. Before, many faced unaffordable premiums or could not secure insurance at all, but thanks to this initiative access is now universal, even in the highest-risk areas.
“Under these new reforms, this government is working with Flood Re and industry to further evolve our approach. By reducing premiums and making wider changes we will ensure that, in its second decade, the scheme is better targeted to support fairness and ensure more low-income households get the support they need.”
Dame Amanda Blanc, Group CEO of Aviva, said:
“I’m pleased Flood Re has agreed to lower premiums for contents insurance for households in Council Tax bands A and B, which was a key recommendation in the Independent Review of Flood Insurance that I carried out for the Government in 2020.
“Reducing premiums for contents-only cover in these bands will help improve affordability and allow lower income households in high-risk flood areas to access the vital protection that insurance brings.”
Graham Brogden MBE, on behalf of the International Property Flood Resilience Association (IPFRA), said:
“It is encouraging to see a stronger focus on making flood insurance more affordable for those on the lowest incomes, who are often the most exposed to flood risk. Reducing costs for these households, alongside investment in practical resilience measures, is an important step forward.
“The commitment to pilot Flood Performance Certificates is particularly welcome, helping to recognise and incentivise action to improve property-level resilience. Bringing together affordability and resilience in this way is vital to creating a more sustainable approach to managing flood risk in the years ahead.”
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