Thursday, 20 June 2013

Questions (68)

Sandra McLellan

Question:

68. Deputy Sandra McLellan asked the Minister for Finance the reason insurance companies have a minimum insurance value of €120,000 for house insurance on residential properties even though some properties are worth as little as €30,000 and buyers are forced to pay for insurance at €120,000; if insurance companies are permitted to do this; and if he will make a statement on the matter. [29804/13]

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Written answers (Question to Finance)

At the outset the Deputy should note that neither I nor the Central bank has the power to set minimum or maximum levels of insurance cover as these are commercial decisions for firms to make themselves. Pricing of insurance is generally determined by an assessment an insurer will make of the risks involved. Generally I understand that previous claims experience will have a major influence on such matters.

I have made enquiries with the Central Bank of Ireland on this matter and they have informed me that the insurance cover for a house is based on the rebuild price of the house (excluding site cost) rather than the open market value of the property, which in the current environment is deflated. Finally, it should be noted that any person who has an unresolved complaint can refer the matter to the Financial Services Ombudsman, at www.financialombudsman.ie, for investigation and adjudication.