Dáil Éireann Debate, Tuesday - 23 April 2024
201. Deputy Catherine Murphy asked the Minister for Finance the steps he has taken in respect of the provision of premiums by insurance companies to persons in homes that are not designated as a flood risk; and if his attention has been drawn to instances in which insurance companies are refusing to provide cover in instances in which OPW flood maps clearly identify areas as not being in a flood area. [17554/24]
View answer202. Deputy Catherine Murphy asked the Minister for Finance if he has engaged with insurance providers in respect of their lack of consistency regarding the way in which and the grounds on which they refuse to provide insurance cover in areas that are not identified as flood risk by the OPW in the context of their mapping and modelling of flood risk areas. [17556/24]
View answer203. Deputy Catherine Murphy asked the Minister for Finance the steps a person can take in instances where home insurance providers will not take into consideration remedial flood works as a mitigation when quoting and-or providing persons with premiums for their home and-or business. [17560/24]
View answerI propose to take Questions Nos. 201 to 203, inclusive, together.
As the Minister for Finance overseeing the legal framework governing financial services regulation, including the insurance sector, I fully understand the concerns of those who find it difficult to obtain flood cover when taking out a home insurance policy.
Current Government policy in relation to flood insurance coverage is focused on the development of a sustainable, planned and risk-based approach to managing flooding. Preventing flooding is the best approach to reducing flood risk and increasing flood insurance capacity. Accordingly, €1.3 billion has been committed to the delivery of flood relief schemes for delivery by the OPW over the lifetime of the National Development Plan to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk.
I must emphasise that the provision of insurance cover is primarily a commercial matter determined by insurers based on an actuarial assessment of the risks they are willing to accept. Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance, or direct as to what cover is provided, as is reinforced by the Solvency II Directive, which is the EU framework for the prudential regulation of insurance in Europe.
Generally speaking, a key driver of home insurance is the property rebuild cost (or reinstatement value), which is based on the total cost to reconstruct the property. As you will be aware, building materials, energy, and labour costs have been subject to significant inflationary pressure since 2020. As construction prices generally increase, rising rebuild and repair costs can also be expected to impact upon home insurance premiums.
While the Government is committed to fostering competition in the market, pricing and underwriting decisions are ultimately made by individual insurers based on statistical data and risk assessment. Nevertheless, the Government has prioritised reform of the insurance sector via the Action Plan for Insurance Reform.
In meetings with the major insurers Government’s expectation that insurers should deal with policyholders affected by adverse weather events fairly, promptly and in accordance with the Central Bank of Ireland's Consumer Protection Code has been clearly reiterated. Linked to this, the need for insurance providers to take a reasonable approach to the provision of cover where properties are proven to be in areas protected by flood defences has been highlighted. These matters remain a priority for this Government and will be taken up by Minister of State Richmond at upcoming meetings the CEOs of major insurers in the Irish market.
Turning to individual policyholders who find it difficult to obtain flood cover when taking out home insurance policies, in the first instance they should engage with the internal resolution processes within individual insurers.
Please note that under the Central Bank’s Consumer Protection Code, insurers are required to engage with consumers honestly, fairly, and professionally to honour all elements of the policies covered. Furthermore, where somebody feels a particular insurance provider has treated them unfairly, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO acts as an independent arbiter of disputes that consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.
Checking alternative insurance quotes is also advisable. It may be of assistance to note that Brokers Ireland, the representative body for insurance brokers in Ireland, can be contacted in relation to this. They have access to a wide range of providers and products, and can offer advice for customers in sourcing cover. Additionally, Insurance Ireland operate an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu.
