Everyone to pay extra to insure flood risk homes
Every household could have to pay out more to subsidise home insurance for properties in areas at risk of flooding.
But according to The Daily Telegraph, half a million households in flood-prone neighbourhoods will still see annual insurance bills rise by up to one third, even after they have been subsidised every other policyholder in the country.
Ministers have reached a new deal with insurance firms they claim will protect people whose homes are at risk and who struggle to afford insurance.
When the new scheme was first announced in June, householders were promised that there would be no increase in bills in general.
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But an analysis of the new plan, conducted by government officials and independent experts, has found that every home insurance policy holder in Britain faces increased bills.
Under the new arrangements, a non-profit making insurance company, Flood Re, will provide insurance cover to 500,000 households in the worst affected parts of Britain.
Flood Re will be funded by a contribution of £10.50 from every household across the country which would be used to pay for repairs.
The assessment said the new pool was at serious risk of running out of money if major floods occurred and as a result home owners would see the £10.50 contribution increase.
A spokesman for Defra told the paper that insurance under the Flood Re scheme would be far cheaper than if there was no subsidy and home owners were abandoned to the open market.
The spokesman added: “If numerous claims are made following periods of very bad weather it is possible Flood Re may temporarily fall into deficit. In this instance insurers would make additional contributions to bring Flood Re back into balance.”