Monday 19 March 2018

Flood-hit families face being blacklisted by insurance companies

  • Insurance companies to blacklist areas that are hit by devastating floods

  • Claimants likely to be left high and dry once damages money paid out

The clean-up operation begins after a section of main road in Quigley’s Point, Co Donegal, washed away. Photo: Reuters/Clodagh Kilcoyne
The clean-up operation begins after a section of main road in Quigley’s Point, Co Donegal, washed away. Photo: Reuters/Clodagh Kilcoyne
Charlie Weston

Charlie Weston

Families and firms that make a claim to cover the cost of the devastating floods face the prospect of their area being blacklisted by insurance companies.

Insurers are braced for a fresh tranche of claims worth millions after thunderstorms and flash floods left a trail of destruction across Donegal and neighbouring counties.

Insurance experts said those making a claim to an insurer for the damage to their homes, farms and businesses were likely to get a payout.

However, they face a stark choice as insurers will then decline to provide them with flood cover in the future.

The revelation comes as homeowners and businesses are coming to terms with the massive damage inflicted by the flash foods.

People who suffered damaged have been advised to employ the services of an insurance assessor to help them detail the cost of the damage.

Paul Kavanagh, who heads up one of the largest insurance brokerages in the country, McCarthy Insurance Group, said insurers were blacklisting locations for homeowners and businesses in any town that had previously experienced flooding.

This was even the case where flood relief works have been carried out.

"The insurance companies won't admit it, but when flooding happens you are blacklisted.

"They won't provide you with flood cover."

He said despite more than €100m being spent by the State on flood relief works in Clonmel, in Co Tipperary, and in Mallow and Fermoy, in Cork, insurers were still blacklisting many people in these areas for flood cover.

Households and businesses can get insurance to cover the cost of rebuilding their homes and to cover the contents, but insurers will put in exclusions meaning that they will not pay out on flood damage, Mr Kavanagh said.

"I live on a hill in Fermoy and if I ever get flooded we will need to build another ark, but I still am blacklisted," he said.

He advised people affected by the floods to employ a loss assessor to act on their behalf when making a claim.

"The loss adjuster operates for the insurance company; it is vital people making a flood claim have an assessor," he said.

Brian McNelis, of Brokers Ireland, the newly merged representative body for brokers, said that homeowners should make the case that the heavy floods were a once in 100 years event.

He said insurers may review at renewal, but will increase rates or excesses.

Jonathan Hehir, of, warned that even those who have not suffered storm damage are likely to be refused flood cover in future if they live in hard-hit areas.

"There will be renewal letters arriving in the post saying insurers will no longer offer flood cover."

He said that flooded homeowners may as well claim now as they will be backlisted next year due to their location.

A spokesman for Insurance Ireland, the representative body for the industry, said that insurers stood ready to help their policyholders and would assess any claims received against the cover in place.

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"In terms of future cover, as with all classes of insurance, claims history and other factors are taken into account by insurers when assessing the nature of the risk and the likelihood of a reoccurrence," he said.

At present, flood cover is provided in 98pc of property insurance policies nationally.

Insurers had paid out more than €1.3bn in the past 10 years for similar extreme events, the spokesman added.

"Insurance Ireland is working with the Government to maintain and increase flood cover in defended areas, where flood defences have been installed, and signed a memorandum of understanding with the Office of Public Works in 2014 on this issue," said the spokesman.

This had led to an increase in flood cover in these areas, Insurance Ireland said.

Irish Independent

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