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Insurance Coverage

Dáil Éireann Debate, Tuesday - 15 September 2020

Tuesday, 15 September 2020

Questions (256)

Patricia Ryan

Question:

256. Deputy Patricia Ryan asked the Minister for Finance if the difficulties that householders living close to bodies of water have in getting home insurance cover will be addressed; and if he will make a statement on the matter. [23510/20]

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Written answers

I am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses. Accordingly, this is one of the reasons the Government has been prioritising investment in flood defences over in recent years.

However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are willing to accept. Consequently, neither I in my role as Minister for Finance nor the Central Bank can interfere in the provision or pricing of insurance products. This position is reinforced by the EU framework for insurance (Solvency II Directive).

Having said that, it is important to remind the Deputy that current government policy in relation to increasing flood insurance coverage is focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. To achieve this aim there is a focus on:

- prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities,

- implementation of flood relief management plans by the OPW to deliver flood relief schemes, and

- maintaining channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in affected areas.

The above approach is complemented by a Memorandum of Understanding between the OPW and industry representatives Insurance Ireland. This provides for the exchange of data in relation to completed flood defence schemes, which should in-turn provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties.

I acknowledge that while there has been an overall increase in the provision of flood insurance between 2015 and 2019, many householders are still experiencing difficulties. This is particularly the case for households living in areas with demountable flood defences.

My Department is reviewing the challenges of property insurance and flooding and indeed this is one of the actions assigned to the Department of Finance under the Climate Action Plan. Over the last year my Department launched a public consultation on Climate Change and Insurance and subsequently met with interested parties. The key themes that arose from the consultation related to (i) the lack of data on flood insurance coverage and (ii) the challenges of obtaining flood cover in areas with demountable defences. My Department is now meeting with key stakeholders such as the Central Bank, the OPW, Irish Public Bodies and the State Claims Agency to further review the issues raised and assess a feasible way forward. This review is in progress and my Department will continue to provide updates on this workstream to the Climate Action Delivery Board.

Finally, the Deputy should be assured that Minister of State Fleming and I will continue to be active on insurance issues including flooding, and we are proactively engaging on all aspects of insurance reform. This is recognised in the Programme for Government’s extensive cross-Departmental insurance reform agenda, which amongst other things, seeks to address consumer and business concerns on the cost and availability of insurance by building upon the work of the Cost of Insurance Working Group.

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