Flood Re is a scheme that keeps affordable flood insurance available to UK households at high risk of flooding. Without it, many of those households would face premiums they could not pay or no cover at all. The scheme works by letting insurers pass the flood risk on their highest-risk home policies to a central pool, so the customer pays a capped price while the market still carries the risk in aggregate.
Why the scheme exists
Insurers price flood on the real likelihood of a property flooding. For homes in repeatedly flooded areas, that price can be unaffordable or unavailable, leaving owners exposed and unable to sell. Flood Re was created so that the cost of the highest-risk homes is shared across the whole market rather than loaded onto the unlucky few. Our guide to flood and storm cover in home insurance explains what flood cover includes on a standard policy.
How it works in practice
The structure has three moving parts.
- You buy a normal home policy from any eligible insurer, at a price that includes a capped flood element.
- The insurer cedes the flood risk on that policy to the Flood Re pool for a set premium.
- The pool is funded by a levy on all home insurers, spreading the cost across the market.
You do not deal with Flood Re directly. You see only your insurer’s price, which is held down by the scheme for qualifying homes. The insurer and the pool handle the risk transfer behind the scenes.
Who qualifies
Flood Re applies to eligible homes built before a set date, occupied by the owner, and insured on a standard basis. It does not cover homes built after that date, because planning policy now steers new building away from flood plains. It also does not cover businesses, which buy flood cover on the open market.
If your home qualifies, your insurer applies the capped flood premium automatically. You do not need to register. If a quote still looks high, check whether your property is correctly recorded and shop across eligible insurers, because the non-flood part of the price still varies.
The limits and the future
Flood Re is not permanent. It is designed to run for a set period and then wind down, on the assumption that adaptation, such as defences and planning reform, will lower risk over time. As the climate shifts, the scheme faces pressure: more properties at risk, and a harder job keeping cover affordable without open-ended subsidy.
The Financial Conduct Authority oversees how insurers treat customers under the scheme, and the Consumer Duty expects fair value to be maintained. Read how the Consumer Duty changes what firms owe you, and our guide to climate risk and your insurance premiums for the wider picture.
Sources
- Insurers — how flood risk is pooled and priced.
- Financial Conduct Authority (FCA) — fair value and vulnerable customers.
- Association of British Insurers (ABI) — flood and climate data.
- Existing guide: flood and storm cover in home insurance.