Body aims to provide cover from April 2016
UK laws to bring in Flood Re come into force today, ensuring that homeowners are able to buy affordable flood insurance.
Flood Re is a not-for-profit organisation run by the insurance industry that allows insurers to pass the flood risk element of a home insurance policy into a fund that will pay any subsequent flood claim. The government provides the ultimate backstop for large claims until Flood Re’s reserves have been built up.
Parliament has approved the rules and floods minister Rory Stewart has signed them into law.
The government has given Flood Re the powers to let insurers provide affordable flood insurance to at-risk homeowners across the UK.
Following authorisation, Flood Re will determine when it is ready to provide cover, and is aiming for April 2016.
Stewart said: ”Flooding can devastate people’s lives and homes and while nothing can take away the distress it can cause, having access to affordable insurance will give people peace of mind.
“Flood Re will for the first time ensure access to affordable flood insurance for people regardless of where they live.
Flood Re chief executive Brendan McCafferty said: ”We are delighted that the government has now put into effect the legislation, agreed by Parliament that gives Flood Re its statutory underpinning.
”Flood Re’s work with the insurance industry, regulators and others will continue. We are working towards an operational start in April 2016 and look forward to delivering on our commitment to helping insurers provide consumers with access to affordable flood insurance.”