Insurers refusing to cover homes that could suffer flood damage
INSURERS are refusing to provide cover for properties that could be subject to flood damage, leaving homeowners having to pay huge premiums to the few companies that will take them on.
Four out of nine insurers would not provide a quote for a property liable to flood damage, the National Consumer Agency (NCA) found. And large swathes of Cork city can no longer be insured following recent floods there.
Last October in Dublin, extensive flooding cost the insurance industry around €130m. Meanwhile, a spate of flooding incidents in the past two weeks, due to prolonged rainfall, has prompted Cork councillors to conclude that it is now impossible to insure homes and business premises in the city.
Now theNCA has found evidence that insurers are turning their backs on areas they feel are prone to flooding.
The state agency sought quotes for a two-bedroom bungalow in Co Longford. The insurers were told the area is prone to flooding. Axa, ChartisDirect, FBD and Liberty Insurance were not willing to quote for the property.
Some of those that were prepared to insure the house would not include flood cover, while another insurer said it would only insure the house subject to further assessment.
Of those prepared to insure the property, an excess of between €250 and €500 was quoted. The excess is the amount of any claim a householder has to cover themselves before they get a payout.
Industry sources have said insurers were increasingly refusing to quote people who were not already insured with them if there was a risk of flooding attached. Those insurers that are continuing to cover existing customers often hike the premiums or impose a higher excess.
The industry paid out an unprecedented €245m in 2009 for flood-related claims, and another €130m last year.
Insurance companies use geo-coding and flood mapping in order to determine which areas are vulnerable to flooding.
Meanwhile, the NCA research also found that householders could save close to €400 a year by shopping around and switching insurers.
The survey reviewed a range of property types throughout the country and found that, across all the profiles surveyed, consumers could make significant savings.
NCA chief executive Ann Fitzgerald said a large proportion of consumers still do not shop around for home insurance.
This means these consumers could be paying more than they need to on their home insurance policy, she added.