Let’s start banging the Flood Re drum
Paul Thompson, CEO Cavere Group, writes a regular column in Mortgage Introducer Magazine.
Flooding in Fishlake, the most recent in a series of major floods to hit the UK in recent years, has once again raised questions over protection, financial cover against flooding, and FloodRe eligibility.
So let’s get to the point and set the record straight – unless your client’s main home was built after 2009 and it’s only used for residential purposes (not let or commercial), they’re eligible for FloodRe. Fishlake residents that purchased home insurance via a broker, only to discover that they were not covered for flood damage have been seriously let down.
There remains an education issue here. Residents often think they don’t need flood insurance because they’ve never previously flooded, Fishlake is a prime example of a village which nevertheless suffered a so called ‘once in 60 years’ weather event. With the onset of climate change, perhaps there’s an argument to say that every resident in the UK is now at an increased risk of flooding.
I can forgive customers not knowing about FloodRe, and I can forgive those buying cover online via an aggregator and not reading the small print (I obviously cannot forgive the aggregators, again price over quality and substance).
What I cannot forgive is the insurance industry as a whole not doing enough to educate, not doing enough to protect, and not doing enough to keep vulnerable customers away from the aggregators. I would argue that it’s morally indefensible to offer comprehensive home insurance but include a flood exemption, no-one should be exempt from entitlement to this protection, indeed with 94% of insurers now signed up to FloodRe this should be a thing of the past.
Brokers come on! Your residential customers can get flood cover as part of their standard home insurance policy at an affordable rate, the insurer simply cedes out the flood risk part of each customer’s policy to FloodRe at point of sale.
Don’t let your clients leave it to chance, check if they have flood cover in place, check that they’ve made the correct disclosures about how close their property is to a flood plain or water course, and speak to them about the importance of flood cover even if not living in known flood zones in order to account for all types of flood risk. Finally, make sure you work with a GI provider with the experience and relationships with insurers that back into FloodRe in order to get your clients the cover they need.