Following on from the demise of the Flood Insurance Statement of Principles, Project Noah is currently being trialled to help the thousands of households who face becoming uninsurable.
In 2000, the government and the insurance industry joined forces to produce a document called the Flood Insurance Statement of Principles. It governed insurers' treatment of policyholders in flood-prone areas and was renewed for five more years in 2008. This agreement is now set to expire in June 2013 and the ABI has warned that it will not be renewed as it is deemed to cause a burden on the home insurance market because policy holders in low-risk areas are paying higher premiums to subsidise those living on flood plains.
As a result, 200,000 flood-risk homes could be uninsurable and therefore plummet in value.
With the government refusing to subsidise flood insurance and home insurers rejecting a compulsory industry-wide levy to help with the cost of flood-risk homes, these 200,000 households are teetering on the edge of financial disaster. Read more about this here.
Now Project Noah – a new flood risk reinsurance pool - is set to launch later this year to enable fair priced home insurance for all households. It is the creation of a risk management firm, a reinsurance intermediary service provider and a provider of digital mapping and land data intelligence. By using its newly developed flood risk pricing model, Project Noah claims it can identify and calculate the flood risk of every residential property in the UK – which in turn will enable targeted flood defence investment.
The objective of Project Noah is to reduce the risk of insuring flood-risk properties by allowing insurers to transfer their residential flood risk policies, less a small retention, into the international reinsurance market.
The goal is that, by reducing the flood risk element in household insurance policies, insurers will be able to offer competitive and fairly priced cover, even to properties with a high flood risk.
This is good news for both homeowners and insurers. For many years, insurers have been wishing to compete for the business of consumers who would otherwise be attractive if it were not for the flood risk to their homes: Project Noah will allow them to do so.
Meanwhile, it is early days for Project Noah and people are advised to continue to search for the best possible policy to suit their flood-risk needs. Take professional advice, speak with Westhill Insurance Services – they have experience of dealing with properties on flood plains and will always go the extra mile to make sure you have the best possible policy. As an independent insurance company, they will shop around on your behalf and find the best solution to meet your needs. Project Noah sounds an excellent solution, but until it becomes available, make sure you do your research on your property. Take time to talk to Westhill Insurance Services who can check the status of your property with regard to flooding, and will help you make sure you don't need baling out if the rains do come!
Contact Westhill Insurance Services, today.