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The 'Flood Re' scheme is in hot water again!

A new report has been made public stating the government's new scheme to protect homes in England and Wales from flooding vastly underestimates the number of properties at risk due to climate change, so states a study from the London School of Economics (LSE).

As many as 800,000 homes in England and Wales are likely to be at significant risk of flooding in a decade, even based on optimistic assumptions of fewer homes being built on flood plains. It is estimated that the number will rise to 1,5 million by 2050 which compares with about 370,000 homes at significant risk in England and Wales in 2008.

Currently, the government's new "Flood Re" insurance scheme, devised in conjunction with the insurance industry, assumes that only about 500,000 properties will be at risk. The £180million a year scheme is to be paid for by a £10.50 levy on all home insurance, from homeowners who are not at elevated risk of flooding as well as those who are. The LSE study found that these risk assumptions could put the new scheme, set to come into force at 2015 and last until at least 2035, in danger of failing vulnerable homeowners.

The main flaw in the Flood Re scheme appears to be that it has failed to take into account the increase in flood risk due to climate change. For this reason the scheme is very likely to be put under increasing pressure and may prove to be unsustainable because the number of properties at risk of probably flooding will increase steeply and the high probability of flooding will have been significantly underestimated.

The LSE's paper has been submitted to the Department of Environment, Food and Rural Affairs (Defra) as part of a consultation on the paper. Defra has said it will not respond until the results are published in October.

The rising levels of coastal, river and surface water flooding means that about 6 million properties across the UK are at some level of risk, though most cases this is not deemed to be a high risk. However, few properties are equipped with flood defence, partly because owners feel this could put off future buyers, and in some cases insurance companies do not provide for such defences when they compensate customers following a flood.

Obtaining insurance for properties on flood plains is never easy. However, at Westhill Insurance Services we have vast experience of providing excellent levels of insurance for all types of properties which may be 'difficult' to insure. Our professional and helpful team of advisors will always make sure they understand the problems you may be encountering in securing your insurance: we will offer advice and support and find the right insurance for you and your property. Generally, properties are defined as having a significant flood risk if they are judged to have more than a 1-in-75 chance of flooding in an average year. Just pick up the phone and make one quick call to Westhill and make your plans watertight.

Contact Westhill Insurance Services, today.

Posted on 20th September, 2013