Dáil Éireann Debate, Tuesday - 9 November 2021
248. Deputy Cathal Crowe asked the Minister for Finance if his Department has engaged with a company (details supplied) in particular with regard to homes under its insurance cover which now have confirmed cases of pyrite and mica; and if he will make a statement on the matter. [54366/21]
View answerAt the outset, it is important to note that for those homeowners whose houses are affected by pyrite and Mica it is a very distressing and serious issue. It is my understanding that HomeBond is one of the providers of latent defect insurance, also referred to as structural defect insurance (SDI). This type of cover provides protection against defects that occur in the post-construction phase and is a 10 year warranty product. The objective of structural defect insurance is to provide cover for a finite length of time in respect of the repair of major structural defects in new buildings. However, I am informed that Homebond withdrew its pyrite cover in 2011 on foot of a High Court decision which held the supplier of construction material liable for damage caused by pyrite rather than the developer. This was upheld in 2014 by a subsequent Supreme Court decision. Therefore, Homebond does not cover material defects, i.e. faults in construction which arise from defective building materials. Homebond’s SDI covers the work carried out by the builder but not the materials used in construction, such as those set out in the question.
Furthermore, it is important to note that Mica damage is not an insured peril and is therefore not covered in standard home insurance policies. Policy wordings generally exclude damage arising from faulty workmanship, defective design or the use of defective materials. It is also my understanding that normal house insurance does not cover defective construction materials – generally this is confined to accidental damage to structure or contents. Insurers will take a risk-based approach to the provision and pricing of insurance and under the insurance regulatory framework Government cannot intervene in this regard.
In order to improve consumers’ recourse to insurance for housing defects, it is important to recognise that insurers will look to the overall building regulation, standards and the legal environment. Accordingly, this is primarily a construction standards and building materials issue which falls under the remit of the Department of Housing, Local Government and Heritage.
Government fully recognises the difficulties facing many homeowners. As such, the Defective Concrete Blocks Grants Scheme was established under the auspices of the Department of Housing, Local Government and Heritage in June 2020. I am informed by that Department that Minister O’Brien subsequently engaged with homeowners in order to review this scheme and received the final report of the Working Group on Defective Concrete Blocks in early October 2021. He has since been in consultation with Government colleagues and other stakeholders regarding the various options available. Minister O’Brien intends very shortly to bring a memo to Government setting out his proposals for improvements in the existing scheme, its future administration and other matters raised in the Working Group report. Any queries relating to this or on building regulations generally should be directed to the Department of Housing, Local Government and Heritage.
