Author Topic: Proposed levy on ALL home insurance due to flooding  (Read 7853 times)

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The Prophet

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Proposed levy on ALL home insurance due to flooding
« on: November 26, 2012, 08:09:04 am »
Home insurance increases for every home owner may be coming due to flooding
Insurers are becoming more accurate at predicting flood risk to individual properties rather than a post code area as previously.
This has resulted in policyholder's premiums rising substantially some as much as 35%, after a new flood risk assessment by their insurers.

The Association of British Insurers says the current pricing reflects accurately the flood risk in 99% of cases although some homes may be on higher ground and be incorrectly assessed.

From June 2013, some homeowners are at risk of having their cover withdrawn because of the flood risk.
This is because the Government and the Insurance industry agreement on universal home insurance irrespective of any flood risk ends.

Amazingly, the ABI is suggesting that an agreement could be reached where no risk and low risk policyholders pay a "small levy" that will then be used to extend cover to homeowners exposed to moderate or high risk of flooding.

This is madness.
You would not expect a mature low risk driver to pay a levy to cover the extra risk of an accident by a young high risk driver, anymore than you would for a mini owner to pay a levy for the extra risk of a claim from a high performance sports car.
You wouldn't expect a non-smoker to pay a levy to cover the higher claim risk of a smoker on a life insurance or critical illness policy either.

To be flooded once is unfortunate, twice is careless!
If people buy homes in areas with a high risk of flooding, or have not had the sense to flood-proof their homes following first-time flooding, then why should everyone else be expected to subsidise the additional risk of insuring their home and bail them out?

In addition, the cost of flood damage to new homes that are flooded within the first ten years, should be paid for by the house builders.


Philofacts

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Re: Proposed levy on ALL home insurance due to flooding
« Reply #1 on: December 05, 2012, 10:05:41 am »
I agree house builders should be liable if new homes are flooded.
In the last ten years around 160,000 new homes have been built in "risky areas".
There is a danger that subsidised insurance for an increased flood risk, may even encourage people to live in flood risk areas.
By making the cost of doing so prohibitive, buyers should be put off, and the house builders would be forced to pay more for land in safer locations,
reducing the nukber of homes at risk rather than adding to the problem.

The planning authorities also have an active role to play too.
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Philofacts

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Re: Proposed levy on ALL home insurance due to flooding
« Reply #2 on: December 19, 2013, 11:57:09 am »
The ABI has announced details of "Flood Re" - a new scheme that has been agreed between the government and the insurance industry, that will provide a not-for-profit fund to enable those at high-risk of flooding to have their premiums capped at a set level according to the home's Council Tax band.

In addition, as the original post outlined, a levy is to be made on ALL home insurance policies.
This will add on average around £10.50 to the cost for everyone when insuring their home.
The new scheme is is due to start in the summer of 2015. 
For more information and comment on the "Flood Re" scheme click

Any new home built after 2009 will NOT be covered for flooding under the scheme!
Caveat Emptor!!!  Check the Environment Agencies flood risk maps before buying any new home!
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Re: Proposed levy on ALL home insurance due to flooding
« Reply #3 on: April 04, 2016, 09:12:56 am »
Well it has arrived. Now every homeowner will be forced to pay an extra £10.50 towards  the 'FloodRe' scheme. I can see this being increased every time flooding reported on the news.

Remember the Insurance Premium Tax? Started  at 5%. It is now 10%.


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