New government reforms to the Flood Re scheme aim to assist flood-stricken homes, including the introduction of cheaper contents insurance for certain households. However, the industry body Propertymark claims that significant gaps in eligibility persist, with rental properties still excluded from the scheme.
The Flood Re scheme, a joint initiative by the UK insurance industry and the government, seeks to make flood insurance more affordable and accessible for households in high-risk areas. From April 2027, the premium charged to insurers for contents-only policies covering properties in Council Tax Bands A and B will decrease from £52 to £25 annually.
Additionally, a cap on the value of individual claims insurers can pass to Flood Re will be introduced from 2028, with insurers covering costs above this limit. Propertymark stated that the cap and wider premium reforms will be developed with insurers before implementation. The government has indicated that limits must be set at an affordable level, but Propertymark believes further detail is needed to assess potential impacts on the cost, excess, or availability of cover for owners of higher-value homes.
Propertymark warns that these reforms do not address existing exclusions and could create a two-tier system. The body previously called for the scheme to be extended to include private landlords, leaseholders, and small businesses to ensure access to reasonable insurance rates. It also highlighted that unaffordable cover for landlords can affect mortgage availability and potentially lead to properties leaving the rented sector.