Flood reinsurance—the Flood Re scheme
Produced in partnership with Groundsure and Burges Salmon

The following Environment practice note produced in partnership with Groundsure and Burges Salmon provides comprehensive and up to date legal information covering:

  • Flood reinsurance—the Flood Re scheme
  • Background to the scheme
  • What is Flood Re?
  • How does Flood Re work?
  • What kind of flooding is covered?
  • Exclusions
  • Leaseholders and Flood Re
  • Commercial property and Flood Re
  • Which insurance policies are covered under the scheme?
  • Which insurance policies are ineligible?
  • More...

Flood reinsurance—the Flood Re scheme

Background to the scheme

The Association of British Insurers (ABI) and the government had an agreement, known as the Statement of Principles (SoP), in place since 2000.

The SoP provided a commitment from the insurance industry to make flood insurance for domestic properties and small businesses available as part of standard household and small business policies if the flood risk is not significant (generally defined as no worse than a 1 in 75 year annual probability of flooding).

The SoP also committed insurers to continue to offer flood cover to existing domestic and small business customers who were at significant risk (over 1 in 75 year annual probability of flooding). This continuation of cover was on the proviso that the Environment Agency had announced plans to reduce the risk of flooding in that area to below 1 in 75 annual probability within five years as part of their Medium Term Plan.

Insurers would also continue cover for the new owners of a previously flooded or at-risk property if the original customer decided to sell. The SoP did not apply to any new property built after 1 January 2009, in an attempt to discourage inappropriate development in flood plains.

The SoP was never intended as a long-term, sustainable measure, and on 27 June 2013, the ABI and the government agreed a Memorandum of Understanding on

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