HOMEOWNERS COULD face an increase of up to 20 per cent on insurance premiums following claims of more than €500 million on the recent floods and big freeze, the Irish Brokers Association has said.
And holiday home owners may face an even greater increase because unoccupied properties were more prone to damage during the January freeze.
According to figures released by the Insurance Industry Federation (IIF) yesterday, the floods, from November 9th to 30th last year cost €244 million. And the freeze, from December 21st to January 21st, cost €297 million.
Industry sources have said the vast bulk of this, up to 90 per cent, will actually be paid for by international re-insurers. But householders will also have to pay.
Brian McNeilus, director of general services at the IBA, said the organisation expects premiums to rise by about 20 per cent this year largely as a result of the flood and freeze claims. “Brokers will re-price all client policies as they come up to renewal and will seek to switch to an alternative insurer where possible to avoid the increase,” he added.
Earlier yesterday, Mike Kemp, chief executive of the IIF, agreed insurance premiums could increase for homeowners, but declined to speculate about how big that increase would be.
He did say, however, that companies would consider making a distinction between holiday homes and full-time residences when setting premiums.
When pipes burst during the freeze, unoccupied homes suffered more serious damage because the leaks were not discovered as quickly as in occupied homes.
“I’m raising the possibility that they might make more of a distinction between those two categories of properties,” he said.
Some 8,500 insurance customers were affected by the floods and more than 22,000 made claims following the freeze.
Most freeze claims were for damage to homes after pipes burst while two-thirds of the flood claims were for damage to commercial premises. €8 million was also paid out for motor claims following the floods.
Cork was the worst affected by floods with 1,164 household claims and 649 commercial claims, both costing over €140 million.
It also came top of the table for freeze damage in terms of the value of its claims. Some 2,172 household claims valued at €32.4 million were lodged in the county, at an average value of almost €14,000 each.
Though Dubliners made almost 3,000 freeze claims, more than in Cork, they were valued at less; an average of just over €9,000 each or over €26.5 million.
Galway was also badly hit with claims. Some 1,124 households claimed for burst pipes in December and January and 471 claimed for flooding in November. Almost €47 million worth of damage was caused in Galway by both weather events.
In Clare, 368 household and 88 commercial flood claims cost a total of €15.7million.
Every county was affected by the freeze. The average lowest claim came from Wicklow, at just over €7,000 each. The most expensive freeze claims came from Sligo where over 600 householders claimed for burst pipes at a value of nearly €14 million or an average of more than €22,000 each.
The federation said it did not know why there was such a wide variety in the value of the claims, but speculated there may have been more holiday homes in Sligo affected by burst pipes and because they were unattended the damage was more serious.
Mr Kemp said January’s freeze was the largest single weather event ever for the insurance industry. He called for a concerted national approach to address issues such as improved planning and development rules to take greater account of flood risk.
