INSURERS have been found to be paying out too little to householders whose homes were damaged by floods.
And a probe by the Central Bank also found that consumers were losing out by not going back to their insurance company to get money that had been retained until all repair work had been completed.
The revelations came from an investigation by the Central Bank that prompted heavy criticism of how insurance companies handled flood claims made between July and December last year.
Floods, particularly in Cork, prompted thousands of homeowners to make claims to their insurers last year.
But a probe by regulators of the claims has found huge shortcomings in how these were handled.
The investigation found a litany of unfair practices by insurers when householders sought to fund repairs to their homes.
The probe found:
* Unfair settlements were made when a deal was finally agreed to fund getting houses back to normal after water damage.
* Insurers were found to be retaining around one-quarter of settlements. Typically one-quarter of the payout was held back until the work was done and receipts produced. But large numbers of consumers failed to claim the last payment from seven insurers.
* Policy documents said householders would have to pay some of any claim themselves, but did not make clear how much.
* Apartment dwellers were sold insurance that was not suitable for their needs.
* Insurers appointed loss adjusters to assess claims but failed to ensure consumer rights were protected.
The Central Bank inspected claims handling for flood damage of 10 insurers. It went into the offices of seven firms, and looked at files of 188 consumers.
Insurers that were found in the probe to have settled with consumers for less than they should have would now be told by the Central Bank to "revisit" the payout, a spokesman said.
He added that consumers who suspect that they did not get a fair settlement should first take up the issue with their insurer and then complain to the financial services ombudsman if they were not satisfied.
The Central Bank's director of consumer protection, Bernard Sheridan, said: "We are concerned by the findings of this inspection, which has identified a lack of controls when using third parties to handle claims, a lack of transparency around the claims retention policy and policy terms that consumers need to be aware of at time of purchase and when making a claim."
Insurance Ireland, which represents the sector, took issue with the findings.
Chief executive of the group Kevin Thompson insisted that insurers had made fair and just settlements to consumers.
"The sector handled over 70,000 household claims in 2012 but the Central Bank's report is based on just 188 claims.
In contrast to the Central Bank findings, Insurance Ireland can confirm that insurers have been very successful in their objective of achieving fair and just settlements with their customers within the terms of their policies."