Home insurance costs to rise after €224m winter payout
HOMEOWNERS CAN expect a further hike in insurance costs following the payment of €224 million in claims as a result of last winter’s freezing weather, the Irish Insurance Federation has warned.
Insurers dealt with almost 30,000 claims relating to damage to homes and businesses due to burst pipes from last December’s freeze. Household claims cost €173.1 million, while commercial claims amounted to €50.6 million.
The record low temperatures last winter followed similar conditions in January 2010 and severe flooding in November 2009. These events resulted in insurance payouts of €765 million, more than twice the total cost of all weather events in the previous 10 years.
“Severe weather events such as these have been very rare events in the past in Ireland. To have had the three largest weather-related losses in our history in such close succession has put pressure on the market,” federation chief executive Mike Kemp said.
Household insurance rates increased by an average of 10 per cent last year and a similar amount the year before. The last two years had been “heavily loss-making” for the industry, Mr Kemp said.
“It would be hard to see that there won’t be upward pressure this year . . . We would expect to see further increases but it will vary from company to company.”
Although the freezing weather affected the whole country, some areas were disproportionately affected. Munster accounts for 28 per cent of the population but accounted for about 40 per cent of the claims cost while Leinster accounts for 54 per cent of the population but only accounted for 32 per cent of the claims cost. The cost of claims in Connacht/Ulster was 28 per cent of the total but the provinces account for only 18 per cent of the population.
More than 90 per cent of claims relating to the damage caused last December had already been discharged, Mr Kemp said.
Counties worst affected by burst pipes were Cork which had €32.4 million in claims, Galway (€24.7 million) and Dublin (€20.2 million).