Hiscox urges a re-think of UK’s Flood Re

Insurer Hiscox has called for the UK government to extend the scope of Flood Re, the UK’s flood insurance pool, while businesses in the country want it to be extended to cover some small to medium-sized enterprises (SMEs).

Hiscox has stated it believes flood insurance will not be affordable to many of those excluded from the Flood Re scheme.

“The government’s proposed flood insurance scheme would leave many homeowners in a desperate situation,” said Bronek Masojada, chief executive of Hiscox. “As things stand one in six households would be excluded from access to Flood Re. That cannot be right.  What made sense in the heat of negotiation just won’t work in the real world.

“Flood Re is great for Britain in concept, but the Government’s proposals fall short in practice. An urgent rethink is needed. It is unreasonable to exclude new homes, buy-to-let properties, and higher value properties from Flood Re protection.  We absolutely support a sustainable, mutualised solution to the problem of insurance, but the Government must listen to growing concern from insurers and the public.”

Meanwhile, the Federation of Small Businesses has called for more help for SMEs. The UK government has promised help for small businesses including a new business support scheme worth up £10 million and extra time for businesses to file accounts without any penalties.

But worries over future flooding and insurance premiums are still rife. John Allen, national chairman of FSB, said more must be done to prevent flooding on this scale from happening in the future.

“With the floods yet to abate, we want the level of support to be kept under review. Firms in these areas will take months to get back on their feet, and may need further help,” he said.

“We want the Government and the insurance industry to look again at the scheme they have in place for households in these areas, Flood Re, and see whether small businesses can be reinstated into that.”