How will insurance premiums be impacted by the Chancellor's investment in flood defences?

By Mohammad Khan, head of general insurance

The Chancellor's funding of £2.3 billion will be welcomed by the insurance industry and people that live in particularly flood prone areas.

However, for homeowners in flood prone areas today's announcement is unlikely to have any immediate effect on their insurance premiums or excesses for flood insurance. Economic respite for such homeowners may come from the introduction of Flood Re next year.

The only other way flood prone homeowners may be able to reduce their insurance premiums and/or excesses will be to invest in improvements to their property to make the property more flood resilient. Such investment typically costs between £20,000 and £40,000.

For homeowners in non-flood prone areas the household insurance market remains competitive and by shopping around homeowners should be able to get reductions in their household insurance premiums.