Why has it taken so long to come in to force?
According to Bostock, the process has been a great deal more protracted than anyone expected at first. The total of the levy needed to be carefully calcuated, insurers and the Government both need to be confident in the processes involved in any claims, and all the rules, regulations and restrictions needed to be thought through.
However, he said the delays had been necessary in order to ensure the system has no bedding-in period - it needs to work first time, every time for customers.
“RSA has been involved from the point Flood Re was first proposed, which was about three years ago, shortly before the Statement of Principles was due to expire in July 2013,” he says. “There’s been lots of complexity involved, at all points in the process - insurers, consumers and Flood Re itself. Insurers’ information systems needed to be fully updated and there were changes needed throughout the industry, the PRA (Prudential Regulation Authority).
“Now all the documents are signed RSA will be an original member from its go-live date on 4th April 2016.
I live in an area prone to flooding - what will I need to do?
You’ll probably notice little to no difference in the way you take out an insurance policy. Flood Re will just work in the background to enable insurers to offer more competitive deals, and give homeowners more choices on both contents and buildings insurance. Part of the overall premium you pay will go towards the Flood Re pot – but that’s about it.
“The customer never gets involved directly with Flood Re, their relationship is always directly with insurers,” Bostock adds. “We, as insurers, will always pass on any savings to the customer from their eligibility for Flood Re cover, and that is all determined by the level of flood risk for that property.
“But don’t forget that the flood element is only one of a number of things that make up a home insurance premium.”