# UK homeowners are about to start paying a tax that subsidises people who live in high



## StewartJ (Nov 20, 2009)

In April, the UK government will enforce a new fee on all home insurance customers that will require them to subsidise the insurance bills of people who continue to live in flood-risk areas.

Perhaps the most frustrating part of the new levy - which functions like a tax on home insurance sales - is that poorer people, or those who choose to live in more modest houses on drier land, will subsidise the insurance for the largest mansions in the riskiest areas near lakes and rivers. :frown2::frown2::frown2:

http://uk.businessinsider.com/flood...medium=referral&utm_term=windowsapp?r=US&IR=T


----------



## GEMMY (Jun 19, 2006)

Does anyone think the subsidies will be passed on by the ins. cos. :surprise:


tony


----------



## cabby (May 14, 2005)

Now that will open a can of worms.

cabby


----------



## StewartJ (Nov 20, 2009)

Whilst all those devastated by the recent floods have my sympathy (we came very very close) I do not think I should have to contribute with an additional tax on my insurance. Another desperate piece of "bottom covering" from call me Dave. :frown2::frown2::frown2:


----------



## HarleyDave (Jul 1, 2007)

Hmmm

Is this anything to do with it??

_Insurers have committed to offer insurance to many previously flooded or at-risk customers in the UK under an agreement - called the Statement of Principles - currently in place between the ABI and the Government. _
_There are separate Statement of Principles agreements for:_
_England (pdf 22.4kB)_
_Scotland (pdf 82.4 kB)_
_Wales (pdf 70.8kB) _
_Northern Ireland (pdf 40.3kB)_
_In each country, the national body with responsibility for flooding carries out flood risk assessments which insurers use to determine how the Statement of Principles is enforced._
_The agreement guarantees that insurers will:_


_renew existing customers' home insurance if their country's national body considers their properties to not be at significant risk of flooding _
_renew the home insurance of existing customers whose properties are considered to be at significant risk of flooding, as long as their country's national body plans to reduce the flood risk in the area below significant within five years _
_continue cover for the new owners of a previously flooded or at-risk property if the original customer decides to sell _
_The agreement applies to homes and small businesses built before 1 January 2009. Check with your insurer to see if your company qualifies as a small business. _
_The current agreement expired on 31 July 2013. The ABI has proposed a new scheme to safeguard the availability and affordability of flood insurance for those at high risk, called *Flood Re *(see below). The aim is for the scheme to be ready for business in April 2016. While work to develop this scheme happens, ABI members will voluntarily continue to meet their commitments to their existing customers under the old Statement of Principles agreement._
*Flood Re*

_On 27 June 2013, The ABI and the Government agreed a Memorandum of Understanding (MoU) on how to develop the model of Flood Re._
_The not-for-profit scheme has been built to ensure flood insurance remains widely affordable and available._
_*Key elements of the framework are:*_


_Flood Re will be run and financed by insurers as a not-for- profit fund which will cover the cost of flood claims from high risk homes._
_Insurers will pass the flood risk element from those households deemed at high risk of flooding to the fund. Premiums for the flood risk will be calculated based on council tax banding up to a maximum limit depending on the Band. _
_Flood Re would charge member firms an annual charge of £180million.This equates to a levy of £10.50 on annual household premiums and represents the estimated level of cross-subsidy that already exists between lower and higher flood risk premiums._
_Flood Re will be designed to fully deal with at least 99.5% of years. Even in the worst half a per cent of years, Flood Re will cover losses up to those expected in a 1 in 200 year - a year six times worse than 2007 - with Government taking primary responsibility - working with the industry and Flood Re - for distributing any available resources to Flood Re policyholders should claims exceed that level._
Cheers

Dave


----------



## dhutchy (Feb 7, 2010)

Bound to happen,don't forget we all pay more for vehicle insurance to pay for the ones who don't bother and cause accident's>


----------



## Pudsey_Bear (Sep 25, 2008)

You could take the view that we all have to live somewhere and those who live in these areas did not build the houses in most cases, I think most of us would like to live near water too, after all most if not all towns and cities were born out of the need for fresh water close by.

I would be in favour of a small amount per year towards helping them out say £5-10, it's not big deal but would that be enough, and might it be the thin end of the wedge for other subsidies.


----------



## erneboy (Feb 8, 2007)

If it adds a tenner or so to our premiums and gives people who previously couldn't get insurance the cover they need I'll be happy enough to pay it.

How often do we hear the refrain "charity begins at home" from those who don't want us to have a Foreign Aid budget? I wonder if they might be the same people who are objecting to this new measure?


----------



## TheNomad (Aug 12, 2013)

Where would you stop with such hypothecation of taxes?

There's a tax on your property which goes to pay for the local services that others don't/can't/won't pay.
There's a tax on your income and expenditure to pay for the health/education/policing etc etc etc costs that others can't/don't/won't pay.
There's a tax in your insurance to pay the costs of uninsured drivers-caused damage/injuries that they didn't pay insurance for, or were driving illegally.

Etc etc etc.


----------



## peribro (Sep 6, 2009)

On the one hand I think it should be "caveat emptor" if you choose to buy a house in a high risk flood area but on the other hand many people were probably not aware. However the people who should really be paying are the builders, developers and planning authorities who have allowed houses to be built in risk areas whilst at the same time concreting and paving over much land that would previously have facilitated drainage. Add them to the Environment Agency that is often more concerned about not disturbing newts and wildlife, then people in uninsurable properties have my sympathy - I'm happy to pay a tenner or so extra on my insurance.


----------



## Pudsey_Bear (Sep 25, 2008)

TheNomad said:


> Where would you stop with such hypothecation of taxes?
> 
> There's a tax on your property which goes to pay for the local services that others don't/can't/won't pay.
> There's a tax on your income and expenditure to pay for the health/education/policing etc etc etc costs that others can't/don't/won't pay.
> ...


Don't we already have those in effect?


----------



## Pudsey_Bear (Sep 25, 2008)

peribro said:


> On the one hand I think it should be "caveat emptor" if you choose to buy a house in a high risk flood area but on the other hand many people were probably not aware. However the people who should really be paying are the builders, developers and planning authorities who have allowed houses to be built in risk areas whilst at the same time concreting and paving over much land that would previously have facilitated drainage. Add them to the Environment Agency that is often more concerned about not disturbing newts and wildlife, then people in uninsurable properties have my sympathy - I'm happy to pay a tenner or so extra on my insurance.


It is a very emotive subject, another issue not mentioned is some properties have never flooded before, but once it has the value will plummet, if you've only had it for a while you're stuck with it, and must be inclined to think it's only a one off.

My last jobs premises were built knowingly on a flood plane, but they planned for it by digging a huge hole and filling it with some basket like structures, and some massive pumps, all paid for by a service charge to all units, the surrounding are flooded badly twice while I was there, but the estate continued to function as normal with no wet feet in any of the units, the estate next door was closed for weeks, so it can be done with a bit of forethought by the builders and planning depts.


----------



## dhutchy (Feb 7, 2010)

I wouldn't begrudge paying a bit extra to pay for the flood victims but i do not agree with paying extra insurance on three vehicles because of criminals ,also i have just renewed my liability insurance for my business which includes tool cover,guess what it has shot up in price because of huge increase in tool theft.Why the hell should i have to pay for their crime.


----------



## rayc (Jun 3, 2008)

dhutchy said:


> I wouldn't begrudge paying a bit extra to pay for the flood victims but i do not agree with paying extra insurance on three vehicles because of criminals ,also i have just renewed my liability insurance for my business which includes tool cover,guess what it has shot up in price because of huge increase in tool theft.Why the hell should i have to pay for their crime.


Is it a coincidence that the Government recently raise Insurance Premium Tax. Every insured household pays an extra bit to help flood affected properties and the Government get 9.5% tax on it.


----------



## H1-GBV (Feb 28, 2006)

There was a couple on TV during one of the recent flood situations who were trying to save money and had not renewed their insurance last Spring. Should I feel sympathy for them? Should I contribute to a charity which helps people like that? Is this a Government policy "forcing" me to contribute to others in a similar situation?

I'm just grateful that I'm reasonably well off and have a reasonable life. I can't imagine some of the horrors people go through in this country, or abroad, through no real fault of their own. If we all considered ourselves to be "human" and cared for everyone, then perhaps the world would be a better place. Sadly, a lot of folk only care for themselves, be it in asset acquisition, drug usage in sport or wildcamping in unsuitable places :frown2:.

I guess I'll just pay the tax and not worry too much - Gordon


----------



## square_steve (Jan 13, 2016)

People buy houses on flood plains by choice, if subsidising them angers so much just don't buy the insurance. 

Not sure how a snipe at people who chose not to sit in a row of white boxes in an encampment to get away from it all is relevant to house insurance.


----------



## Brock (Jun 14, 2005)

Somebody has to pay whether it is the Government, more taxation required, or Insurers, higher premiums. If we remove properties at risk of flooding from the housing market, somebody is going to have to pay for building new houses. Or pay for the cost of those affected being housed under social care.

If you want, you can opt out of insurance by self-insuring. You can search Land Registry's Flood Risk Indicator if your property is registered. You can move to a country with no floods or other national emergencies.

Flooded properties are one thing, the damage to infrastructure such as roads and railways is another.

Of course, we could radically change our approach to floods and pay farmers to set aside land which can act to hold high levels of water during periods of flood. Or we could buy up the land and rent it back to famers. The challenge to the Environment Agency/Government is how much you spend on flood defences/responses to floods compared to the risk of flood. Hmm, should I spend it on the Somerset Levels or in the north; oops wrong decision, it's the Thames that's flooding now.


----------



## square_steve (Jan 13, 2016)

As most disasters seem to happen somewhere the size of Wales according to the media I make a point of avoiding areas the size of Wales. 
Seems to be working so far.......


----------



## patp (Apr 30, 2007)

It is a little known fact that the EU directed our government to stop dredging our rivers. This was to preserve them as a natural habitat. Lovely thought, and I am all for conserving our natural habitat. It has, however, as the Somerset levels, and other areas, showed caused a huge impact on the levels of flooding. Water will always find its own level and that is the sea. If we went back to dredging our rivers, so that water can reach the sea as quickly as possible, and "encouraged" farmers to go back to maintaining their ditches I am sure that there would be a huge improvement in the amount of rivers bursting their banks.


----------

