Flood Re may be three times more expensive than the benefits it offers
Flood insurance is becoming a costly issue for homeowners in the United Kingdom. Flood Re, an insurance initiatives designed by the UK government and the Association of British Insurers, may be a costly burden on homeowners that want to protect their properties. According to the Committee of Climate Change, Flood Re will cost three times more than the benefits that it will provide to consumers. This could mean that many homeowners will be uninterested in purchasing flood insurance coverage, even if their properties are at risk.
Flooding will become a major risk for homeowners in the United Kingdom
According to the Environment Agency, a growing number of homes will be placed at risk of flooding in the coming years. Even in the best case scenario, the agency believes that floods will cause damage to a great number of homes in the United Kingdom. Flooding is, perhaps, one of the greatest risks associated with climate change facing the country currently. Without adequate flood insurance initiatives, these risks could translate into crippling financial problems in the future.
Flood Re will provide coverage to 500,000 homes in the country
Flood Re is meant to provide homeowners with access to flood insurance protection. Because floods can cause a great deal of damage, many insurers had been unwilling to manage the risks associated with floods on their own. As such, the UK government had been working with insurers in order to make the Flood Re program possible. The program is expected to provide coverage for some 500,000 homes in the country, though an estimated 200,000 of these homes would be hard pressed to afford the coverage that they would receive.
Flood Re could reduce the government’s exposure to financial losses
Flood Re may bring significant benefits to the country, however. Because the United Kingdom does not have a universal flood insurance program, the cost of a flood would either fall on the government itself, or the victims of the flood. Flood Re will bring the insurance industry into the equation, allowing the government to be relieved of some degree of financial liability for natural disasters.
