Residents of the most expensive homes in flood risk areas will have to pay home insurance premiums 20 times more than the UK average if they are left out of the Flood Re scheme, Hiscox chief executive Bronek Masojada has warned.
At the moment rented properties, leasehold properties, homes built after 2009 and H-band council tax homes will be excluded from the Flood Re scheme when it comes into force in summer 2015.
Flood Re would cap insurance premiums for homes in flood-prone areas and be funded by a levy on home insurance providers.
Hiscox supports the overall initiative but feel that current plans are unfair and unworkable, Masojada said.
“The excluded will also have to pay a levy to fund Flood Re, but would be unable to purchase subsidised insurance from Flood Re, even though their neighbours and other bands would be able to,” he said.
Equating the levy to a £10.50 charge per residential property was “highly misleading,” Masojada added.
“It will actually be 2.2% of premium paid and we estimate that Band H homes will pay 20 times more than the average home in Britain.
“We are calling on the government to work with us to find a solution to ensure that either these groups are included in Flood Re, or that they are excluded fully – both in payment and benefit.
“Floods are one of the most traumatic claims we see, a flood doesn’t discriminate and neither should the government,” he said.
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