Hundreds of thousands of households which are at risk of flooding will benefit from affordable insurance following an agreement between the Association of British Insurers (ABI) and the government.
As a result, the current Statement of Principles, which ensures owners benefit from affordable flood insurance as long as the government continues to invest in flood defences, will be replaced by the not-for-profit Flood Re fund from summer 2015.
Under Flood Re, insurance premiums will be linked to council tax bands up to a cap dependent on the band the property falls into. Consequently, homes in bands A and B will pay a maximum of £210 a year, increasing to £540 for properties in Band G.
It will be funded by a levy of £10.50 a year on all home insurance policies, which matches the current cross-subsidy built into policies, resulting in there being little impact on current premiums.
However, it is not yet clear whether small businesses with a turnover over of less than £1 million will fall outside the scope of Flood Re, despite currently being covered by the Statement of Principles.
At Palmers Solicitors, our Residential Conveyancing Department can advise on all aspects of moving home and residential property law, as well as offering competitive home insurance quotes through our partners Hood Direct.
For more information, please visit our website or contact one of our fee earners.