Living in the UK unfortunately means experience a rollercoaster of weather conditions and more recently we have had from mini heatwaves to thunderstorms and heavy rainfalls. When the bad weather kicks in we usually become disappointed and think of the disruption it causes to our plans, outdoor activities and more. However, we rarely think about what is actually causing the diverse change in weather or indeed the impact and risk it can have for homeowners and residential properties.
A very topical issue in the headlines recently have been round climate change. With climate changes sea-levels rise, weather becomes more extreme and erratic meaning the threat of flooding in the UK is ever-increasing. The Met Office records show since 1910 there have been 17 record-breaking rainfall months or seasons – 9 of which have occurred within the last 20 years (Sourced Morgan Clark Claims). Furthermore, reports state our homes are more likely to be flooded than burgled and 1 in 6 properties in England alone are at risk of flooding from rivers.
According to a report by the Carbon Brief a lot of rain falling in a short space of time raises flood risk, and there’s already evidence heavy rainfall is becoming more frequent in the UK due to climate change, this has also been reinforced by the Met Office.
Additionally, statistics show 25% of flooding occurs outside of areas formally recognised as being flood prone. Overall, there is a crucial need for homeowners to have home insurance in place and understand the importance of flooding in their area and indeed if their insurer is actively part of the Flood Re scheme (Sourced Morgan Clark Claims).
Every insurer that offers home insurance in the UK must pay into the Flood-Re Scheme. This Levy raises £180m every year and used to cover the flood risks in home insurance policies. Flood-Re works with insurers behind the scenes, when a home owner buys home insurance cover, as the insurer you can choose to pass the flood risk element of their policy to Flood Re for a fixed price.
If your client makes a valid claim for flooding, as their insurer you will settle the claim, however you will receive a reimbursement from the Flood-Re fund. In short, home insurance and polices are bought in the usual way and the Flood-Re scheme covers the flood risk which helps to keep premiums down.
Flood-Re provides UK Homeowners, who otherwise may be unable to obtain Flood cover owing to the location of their property and level of Flood risk, a solution that provides peace of mind and reduction in hugely inflated premiums and peril excesses. UK Household Insurers are subscribed to the Flood-Re Levy initiative, however the on boarding process and distribution of the Flood-Re concept to Brokers and Customer alike has been a little slower. In particular across the wholesale market where development costs have at times been prohibitive and certainly for Prestige Underwriting it has taken some time to fully understand the investment opportunity regardless of the clearly identifiable benefits that are brought to the customer. It has been possible for customers to access Flood-Re via certain channels of distribution and more so on the direct side of the market, however we know that ensuring the wider UK community, currently hampered by the risk of Flood, have access to a solution via their broker is imperative and that the benefits created by the Flood-Re initiative are realised fully.
At Prestige Underwriting we are committed to ensuring our partners are able to be competitive in the market and offer their client an edge when it comes to insurance and flood risk, in particular when the circumstances go beyond Flood to include circumstances such as Listed properties, Thatched Home, non-standard construction materials, Holiday Homes and Unoccupied properties. We have increased the reach of Flood-Re and our investment into the development of IHP, EDI and Portal based solutions helped achieve this. We are combining the benefits of our non-standard proposition with Flood-Re capability and believe that this will offer a unique solution to our brokers via multiple channels of distribution.
Should you have clients in high-risk flooding locations and find it tricky to gain suitable cover it is worthwhile getting in touch with our home specialist team to learn more about the cover available via our Coverall Product.