New scheme boost for residents at risk

A new scheme that works to provide affordable insurance to homeowners in flood risk areas is starting to make a difference in Morpeth.

Thursday, 28th April 2016, 2:43 pm
Updated Wednesday, 4th May 2016, 3:06 pm
Brought to you by the Morpeth Herald.

And community representatives are urging residents to shop around if they are unable to achieve savings as a result of the alleviation project for the town being taken into account.

Both the Morpeth Flood Action Group (MFAG) and Morpeth Town Council have been highlighting the difficulties facing residents in securing a reduction in their flood insurance premiums, even though the new defence scheme has been in effect since last summer.

With the introduction of Flood Re, however, the situation does appear to have changed.

The initiative, which came into effect earlier this month, is technically a reinsurance company. Unlike other reinsurance companies, it is a not-for-profit fund owned and managed by the insurance industry and it has been designed to address the specific issue of affordability for people living in flood risk areas.

There are criteria to qualify – for example, properties built after January 1, 2009, are not covered.

The organisations have asked whether the lower flood risk for Morpeth with the flood alleviation scheme in place may affect the town’s Flood Re position when the Environment Agency flood maps are updated next week.

But the company has said any changes will not impact eligibility to the scheme as the decision for including a policy onto the scheme rests with individual insurers.

Coun David Parker, chairman of the town council’s finance and general purposes committee, has been keeping a close eye on the situation in Morpeth.

He said in a statement: “Since the introduction of Flood Re, some Morpeth residents have succeeded in getting reductions in their premiums and/or their excesses as a result.

“One or two householders have been spontaneously telephoned by their insurance company, asking if they would like a new quotation applying Flood Re.

“Anyone wishing to get insurance cover is advised to look at the Flood Re website before telephoning insurance companies – telephoning seems to be more effective than doing business online.

“Until recently, it was thought that the difficulties residents faced was due to the failure of the Environment Agency to update its maps since the alleviation scheme was opened.

“However, events in recent days suggest otherwise, as many insurance companies appear to have been waiting for the introduction of Flood Re before making available affordable premiums.

“We will have to wait and see what the wider picture is with insurance quotes for properties in flood risk areas of Morpeth in the coming weeks and months, but I personally believe that once some firms see that their competitors have signed up to Flood Re, they will follow suit as it would negatively impact their business.

“What is particularly pleasing is that the work done by the town council with its MFAG and Morpeth Chamber of Trade partners between 2010 and 2014 has helped to produce something that will undoubtedly provide householders in high flood risk areas with affordable flood risk insurance.”

The pool of money to cover the claims made on policies which are in the scheme will come from two places – the charge for each policy that is passed into Flood Re and an additional annual £180million levy on all home insurers in the UK.

MFAG chairman Alan Bell said: “We’ve heard from people living in high flood risk areas of Morpeth that substantial savings have been made on premiums and excesses, which is pleasing.

“We’re happy to recommended that people try Flood Re, but we’ll be monitoring the situation to see what insurance companies do when they take into account updated information about Morpeth.”

A Flood Re spokesperson said: “The Flood Re scheme has been designed to help homeowners living in high flood risk areas across the UK to access more affordable flood insurance.

“Every property that meets Flood Re’s eligibility criteria can benefit from the scheme.

“It is, however, up to individual insurers to decide which policies they cede onto Flood Re. Changes to the Environment Agency’s flood maps will not impact eligibility to the scheme.

“If residents in Morpeth are still experiencing difficulty in getting a better deal, we would encourage them to shop around to find a policy that best suits them.

“They can see a full list of insurers that are on-board with the scheme on our website:”