Ministers to tackle insurance companies on flood cover

Insurance companies will be challenged by the Government on Tuesday on why they are apparently refusing to provide cover in areas with flood relief schemes in place.

Taoiseach Enda Kenny and relevant Ministers will meet representatives of the industry in Government buildings on Tuesday.

Mr Kenny said there cannot be a position where no cover is provided when millions have been spent by the State to build flood defences.

“We need to have a very forthright discussion with the insurance companies,” said the Taoiseach. “There is a difference between towns and urban areas where defence against flood has been put in place that has been seen to work as in Fermoy, Clonmel and others.

“The stories I have been getting is that people are still unable to get insurance for their homes or their businesses,” he said. “We need to tease that out with insurance companies.”

Insurers, for their part, deny that their response to the floods has been inadequate.

Insurance Ireland said it was the responsibility of the Government to build adequate flood defences in unprotected areas of the country before insurers will agree to any new scheme.

However, three senior Government Ministers have indicated homeowners in those areas are still not being catered for.

Industry narrative

Minister for Defence

Simon Coveney

said it was time for a frank discussion with the firms.

“The narrative that is coming from the insurance industry and others in the last number of days has been, ‘we are not going to insure unless the State invests in flood protection measures’, but that’s not the question we are asking.

“The question we are asking and they should be answering is, when the State spends tens of millions of euro on flood defences, as it has done in Fermoy and Mallow and Clonmel, and where flood defences are working, what are they going to do in terms of providing cover?

“I think we need an open- minded discussion with the insurance industry on this, and the insurance industry needs to start providing insurance for homes and businesses in these protected areas, rather than trying to find excuses not to.

“We need some frank talking,” Mr Coveney said. “If the insurance federation say they are going to cover when we [the Government] put money in place, then they need to follow through on that commitment and if they do not, then the State is going to have to act.”

Policy levies

The Government has indicated it may introduce levies on insurance policies as part of its response to the flooding crisis.

Under consideration is a UK model, in which a £10 annual levy is paid on each household’s insurance premium.

Minister for the Environment Alan Kelly confirmed the position was being examined.

However, he said the Government was conscious that people were already paying two levies on their insurance.

Minister of State at the Office of Public Works Simon Harris has said the meeting will be the first step in drafting possible policy measures.

He said an inter-departmental group is examining all areas, and the conversation with companies would feed into that.