Insurance firms refusing home cover to previous claimants
Published 02/02/2010 | 05:00
HALF of insurance companies are refusing to cover householders who have made a previous home insurance claim, shocking new figures reveal.
The move was condemned last night as a form of protectionism, with accusations that insurers were attempting to stop householders who have made a claim from switching to another company.
A survey by the Financial Regulator found that one householder who had made a claim for €8,000 after a fire in 2007 was unable to get insurance renewal quotes from FBD, Aviva, ChartisDirect and Lloyds selling through Getcover.com.
The research also discovered many householders affected by the recent floods were finding it impossible to switch to another insurer. When they could get cover they were being forced to accept an excess.
Householders who have been hit by floods are also being told to outline in detail changes they have made to their home to reduce the risk of future floods.
The regulator sought insurance quotes for a number of different houses. But when its staff, posing as householders, sought quotes for a semi-detached house in Bray, Co Wicklow, where a previous claim had been made, half the insurers did not want to do business.
All of those insurers who were willing to quote wanted the householders to pay between €125 and €250 themselves before the insurer would pay out on a claim.
The surveyors sought quotes for a house which costs €175,000 to rebuild with contents worth €52,500. The householder had a claim in 2007 for fire damage of €8,000.
The regulator warned: "Consumers with a previous claims history may find it more difficult to get their insurance renewed.
"Half of the insurance companies did not quote for a three-bedroomed semi-detached house in Bray, which had a previous claim in 2007 for fire damage worth €8,000."
Chief executive of the Consumers Association Dermott Jewell accused insurers of turning their backs on people forced to make a claim.
"This smacks of protectionism because, by refusing to quote someone who has made a previous claim, insurance companies are forcing consumers to stay with their existing insurer so they can recoup some of the money that was claimed."
Mr Jewell called on the Department of Enterprise to investigate what he said was an attempt by insurers to cherrypick and segregate the market.
Michael Horan of the Irish Insurance Federation said that there was still a large choice for householders in the market when it came to home cover, despite some insurers refusing to cover people who had made claims.
He said the recent floods and the big freeze had meant the level of series claims had shot up and insurers were losing money on home insurance.
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