Sunday 15 December 2019

Check policy small print for cover restrictions by stealth

Insurers are so good at covering their own backs that you could find yourself paying through the nose for any damage caused by floods or snow this winter -- even if you have insurance, writes Louise McBride

Checking: Insurers are investigating the circumstances of each and every claim
Checking: Insurers are investigating the circumstances of each and every claim

NOT only did the big freeze of January 2010 bring the country to a halt, it pushed the cost of insurance claims so high that many of us have had to swallow hefty house insurance price hikes since.

Insurers forked out nearly €300m in claims to people whose homes were damaged by burst pipes last January. And as the icy weather came only a few months after the floods of November 2009 (which cost insurers about €244m in claims) it's no surprise that many insurance companies have since pushed up the cost of their premiums.

But this isn't the only way insurers have covered themselves.


If we get another big freeze this year and you make a claim for damage caused by burst pipes, you could find that the excess -- the first part of a claim you have to pay for yourself -- is so high that it won't be worth your while making a claim.

"Some insurers increased the excesses for certain damage, such as that caused by the escape of water," said Jonathan Hehir, director of insurance broker CFM Group. "In some cases, this excess has gone from €250 to €1,000."

Over the last year, for example, FBD has increased the excess for water damage to holiday homes and investment properties from €500 to €1,000. If you are living in the property, FBD has increased the water damage excess from €200 to €500. Zurich Insurance increased the excess for damage caused by the escape of water or oil from €250 to €500. AXA has introduced a new excess of €1,000 for damage caused by the escape of water -- previously this damage was covered by its standard excess.

Many home insurers have also increased the standard excess (the least you have to pay if you make a claim) on house insurance policies over the last year. AXA has increased its standard excess from €250 to €350 and FBD has increased it from €200 to €250. In August 2009 -- before November's floods and January's freeze -- Aviva increased its standard excess from €125 to €275.


If you're changing your home insurer this year, or buying home insurance for the first time, chances are you'll find a few endorsements or warranties (conditions that you must meet to be covered by your insurer) lobbed on to your new policy.

Even if you're sticking with your existing insurer, it's worthwhile checking if there are endorsements on your current policy so you don't get caught out. If you claimed a discount on your home insurance a few years ago, such as for having an alarm in your home, you may have agreed to certain conditions -- and if you don't meet them, your insurer could refuse to cover a claim from you.

If you're with Aviva, for example, your alarm may have to meet the IS199 or EN50131 standard.

With AXA, you could have an intruder alarm warranty on your policy which states that you have to maintain and regularly inspect your alarm.

With Quinn Direct, you could have an alarm warranty which requires your alarm to be "set at all times when a responsible adult is not in the home".

If you're with Allianz, you could have an endorsement which requires all ground floor windows and "other accessible opening windows" to be fitted with key-operated window locks.

If you're insuring your holiday home with FBD, you must ensure the water tanks in the property are drained down between November and February -- or that the central heating system is set to operate automatically if the temperature falls below a certain level.

Assumptions may be built into your policy, such as an understanding that the property won't be unoccupied for more than a month or two. Don't underestimate the pickiness of your insurer.

"Insurers are more than ever before investigating the circumstances of each and every claim," said Hehir. "They're looking into previous claims that have not been disclosed, the occupancy of the property, and so on. In one case, we heard about an insurer who was checking the ESB bills to see if the property was being inspected routinely by the client.

"You need to be 100 per cent sure the information you are giving your insurer is correct when making a claim. Any mistakes could result in any further claims you may have not being paid," said Hehir.


The new mobile speed cameras being rolled out next month could be about to put some extra cash into the pockets of insurers. Speeding drivers will probably start to clock up a lot more penalty points than before once the new cameras, which will be in vans parked on roadsides, kick into action.

If drivers clock up a certain amount of penalty points, they usually have to pay more for their car insurance -- if they can get insurance at all.

Many insurers increase your premium even if your penalty points are for minor offences such as for not wearing a seatbelt or using your mobile while driving.

AXA, for example, increases your car insurance premium by 35 per cent if you've eight penalty points for minor offences, by 25 per cent for seven points and by 15 per cent for six points.

"We do not apply a loading for customers who have less than six penalty points unless the points are related to a conviction for careless driving, dangerous driving or other serious offence," said a spokesman for the insurer.

FBD increases your premium by 25 per cent if you have more than six penalty points.

Allianz could increase your premium if you have more than four penalty points.

With Aviva, drivers with no penalty points get a 20 per cent discount, while drivers with up to two penalty points get a 10 per cent discount. "Drivers with more than two penalty points receive no discount," said a spokesman for Aviva. "When a driver has six or more penalty points, a loading is applied."

Neither Aviva, Allianz nor Zurich will quote you for insurance if you're a new customer and you have more than four penalty points. With FBD, the cut-off point is six and with AXA; it is usually eight.

Sunday Independent

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