Question to the Department for Environment, Food and Rural Affairs:

To ask His Majesty's Government what assessment they have made of the benefits of redesigning the Flood Re scheme to allow its application to properties and houses in London which are (1) divided into three or more flats, and (2) blocks of flats.

Answered by Baroness Hayman of Ullock - Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs)

The Flood Re scheme allows for insurers to offer discounted premiums to leasehold properties consisting of three or less units where the freeholder lives in one of the units. As larger blocks, of four or more units, are classified as a commercial business, the Flood Re scheme does not apply to buildings insurance, though tenants and leaseholders can access Flood Re supported contents insurance regardless of block size. There’s currently no evidence of a widespread systemic problem for residents in accessing insurance, where they are ineligible for Flood Re.

Defra regularly reviews scheme eligibility. Expanding Flood Re to businesses would introduce a new business levy, effectively forcing businesses nationwide and indirectly customers, to subsidise profit making firms in flood-areas. Any expansion to Flood Re’s scope would need careful consideration of impacts on scheme operation and costs.