Cold weather claims will drive up insurance by 10pc
Published 01/12/2010 | 05:00
HOUSEHOLDERS were warned yesterday that claims due to the freezing weather were likely to prompt insurers to hike premiums by up to 10pc.
A repeat of January's epidemic of burst pipes during the last big freeze will lead to another hike in home insurance premiums, experts warned.
Claims from the big freeze in January this year cost the insurance industry €300m, on top of €244m from the flooding before last Christmas.
In the last 12 months alone, home insurance costs have shot up by 14.5pc, according to Central Statistics Office.
Now the Irish Brokers Association (IBA) has predicted that premiums will rise again by up to 10pc.
The IBA's Ciaran Phelan said: "It is an inevitable consequence of a prolonged spell of weather conditions like Ireland has been experiencing over the last week that there will be a significant rise in claims on house insurance policies.
"This coming after the record payouts of last year due to the floods and similar weather to now will most likely have an impact on premiums going forward with possible increases between 5pc and 10pc."
Aviva, the largest general insurer in the market, said it already had a surge of calls from consumers indicating that they would be making claims on their home and motor policies.
A spokesman for Aviva predicted that its costs were set to mount as the big freeze went on.
It said that most problems with freezing weather were preventable if householders took simple steps like putting an old carpet over an external stopcock, opening an attic trap door to allow heat into the attic, and leaving the heating on a timer if the house was unoccupied.
Chief executive of the Professional Insurance Brokers Association Diarmuid Kelly said that insurance premiums had risen by between 20pc and 30pc in the past two to three years.
He said further rises would make it unaffordable.
Head of the Consumers' Association, Dermott Jewell, warned insurers that cash-strapped households would just not be able to afford home insurance if there were further hikes.
"You can bet your life that insurers will hike premiums again and blame the cost of claims. But they should realise that if prices keep going up then some people won't buy home insurance," Mr Jewell said.
A recent survey by AA Ireland showed that a third of consumers had reduced their level of home insurance cover over the last two years to cut costs.