Depending on where Mr. Watersedge lives, there are important factors that will influence his insurance options:
This article is a part of a series on flood insurance options. Read the intro and meet Mr. Watersedge here.
In the United Kingdom, Flood Re was developed in 2013 as a not-for-profit company. Flood Re was agreed between UK flood insurers and the Government, with full implementation in April 2016. The Flood Re approach allows insurers to pass the flood risk part of a home insurance policy into a fund that will pay for subsequent flood claims [1].
Flood Re only covers flood risk. In order to pay for claims after flood damage occurs, there is a central fund comprised of two elements; premiums passed on by insurers and an annual levy.
Premiums charged to insurers are based on a council band system. Flood Re caps the insurance of home owners in in flood-prone areas to £210 pounds per year for homes in “Band A and B”, rising to £1,200 pounds per year for homes in “Band H”, for more expensive properties. The policy covers 500,000 properties at risk of flooding so, depending on where you live in the floodplain, you can be eligible for a specified amount of insurance coverage [2]. For Mr. Watersedge who lives in the “Band E” area, he is eligible for a cap of £330 per year.
Flood Re: Council Band Tax System [3]
| Council Tax Band | A,B | C | D | E | F | G | H |
| Buildings policy | £132 | £148 | £168 | £199 | £260 | £334 | £800 |
| Contents policy | £78 | £98 | £108 | £131 | £148 | £206 | £400 |
| Combined policy | £210 | £246 | £276 | £330 | £408 | £540 | £1200 |
An annual levy is also be paid by all insurers that are authorized to write home insurance policies in the UK. This levy is set at £180 million pounds per year for the first five years and will be charged based on each insurer’s market share [4]. Overall, homebuyers can purchase home insurance like before; however, the number of affordable home insurance options increase for homes susceptible to flooding. In Mr. Watersedge’s case, because he owns a home on the edge of the Flash River, this makes his home susceptible to flooding and increases the affordability of his flood insurance options.
Flood Re is a new scheme in April 2016. There have been some initial concerns raised:
While this option is affordable for susceptible homeowners, the United Kingdom policy may not be the best option for Mr. Watersedge because it does not cover rental properties. As a result, he would be responsible for covering the costs of damage and replacement for the rented basement and contents. Nonetheless, because Mr. Watersedge lives on the main floor of his home damage to this part of his property and contents would be covered. Therefore, Mr. Watersedge could receive some coverage while paying for his damaged basement.
The Flood Re program is designed to enable high flood risk households to obtain affordably priced flood insurance. Prior to Flood Re the Flood Insurance Statement of Principles Policy was in operation for 16 years. With increasing flood risks Flood Re offers an estimated 300,000 to 500,000 additional homes affordably priced flood insurance. Flood Re proves to be an innovate approach to flood insurance where government and industry have joined to create a non-governmental organization that accommodates flood insurance options and insurance providers. Once the program is fully implemented in 2016, Flood Re could provide a helpful model for Canada to consider when addressing flood insurance.
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Ross has extensive executive experience in Operations, Governance, Information Technology and Strategy at the board and senior management level including Mancal Corporation, Mancal Energy, Highridge Exploration and Atlantis Resources. He has worked in Oil and Gas, Coal, Commercial Real Estate, Portfolio Management, Recreation, Retail and Water and Wastewater Treatment. His experience is also geographically diverse having overseen operations in Canada, the United States, United Kingdom and Northern Ireland. Additionally, he has been on the board of companies with operations in Argentina, Azerbaijan, Barbados, Kazakhstan, and Russia. He has served on numerous Public, Private and Not for Profit Boards across a number of industries.
Ross has been active on several industry Boards and committees including the Canadian Association of Petroleum Producers (CAPP) and The Schulich School of Engineering Industry Advisory Council at the Schulich School of Engineering.
Brian is a seasoned Cleantech entrepreneur with a proven history of successfully bringing complex water technologies to the market. With over 25 years of experience, he has led various organizations to achieve significant milestones in the industry.
Having started as the founding CEO of the Pressure Pipe Inspection Company (PPIC) and later taking the helm at the Water Technology Acceleration Project (WaterTAP), Brian’s entrepreneurial spirit has been instrumental in driving innovation and growth within the sector.
He is an active investor in the cleantech sector and has served on many boards including the Ontario Clean Water Agency.
Actively engaged in industry associations like AWWA, WEF, IWA, and ASCE, Brian enjoys collaborating with fellow professionals to promote advancements in the field.
Brian holds an undergraduate degree and a PhD in Physics from Queen’s University, which has provided him with a solid technical foundation. As a member of the Institute of Corporate Directors, he brings valuable insights to corporate governance.