IFSRA advises consumers to shop around

Consumers can save up to 50 per cent on home insurance premiums by shopping around for cover, the Irish Financial Services Regulatory Authority (IFSRA) said yesterday.

The financial watchdog's consumer director, Ms Mary O'Dea, said it was very important that consumers did not automatically stay with their current insurer each time they received their renewal notice.It was even more important for consumers living in areas prone to flooding and subsidence to shop around.

IFSRA said it had received numerous calls to its helpline from consumers who were having difficulty getting insurance for properties in these areas.

Three of the six consumer profiles contained in the regulator's first cost survey of the product feature homes in areas liable to flooding or prone to subsidence.

Both Hibernian and Axa, two of the largest non-life insurers, refused to quote for a detached house in Co Galway and a five-bedroom bungalow in Co Kerry located in areas liable to flooding, despite the fact that no claims had been made on either property in more than five years.

Hibernian, Axa and Ecclesiastical also refused to cover a 90-year-old detached house in Co Monaghan that had not been affected by subsidence but was located near where other properties had been damaged. Eagle Star agreed to provide insurance only on the basis that flood or subsidence cover was excluded.

Mr Michael Horan, manager for non-life insurance at the Irish Insurance Federation (IIF), said insurers looked at the claims exposure of the individual property as well as the flood defence measures taken by the local authority before deciding whether or not to quote.

"Insurance is about risk, it's not about insuring an inevitability," Mr Horan said. "Where properties are being flooded repeatedly year after year, they become uninsurable."

However, he said the problem only affected "small pockets" of the country and that the IFSRA survey showed that homeowners were still able to get cover.

A review group set up by the Minister of State at the Office of Public Works, Mr Tom Parlon, is expected to publish a report on national flood defence policy shortly.

The IIF is calling for a single national agency to co-ordinate anti-flood measures. Currently, the responsibility is shared by the Office of Public Works, local authorities and various other agencies. Home insurance premiums increased by up to 50 per cent at the end of 2002 after a number of storms and floods, and the IIF recently warned that one more major weather event could destabilise the market.

Elsewhere, the IFSRA survey found significant differences in premiums. For example, a three-bedroom terraced property in Dublin 5 with a rebuilding cost of €200,000 and contents worth €25,000 was quoted €295 by a Royal & SunAlliance broker and €635 by Ecclesiastical.

Axa and Hibernian also refused to quote for a semi-detached house of more than 100 years old in Cork which had made a €3,000 claim for burglary two years ago.

Consumers who sourced their home insurance through Royal & SunAlliance and FBD were the most likely to get the cheapest quotes, the survey showed.

However, the "excess" - the first part of any claim that the homeowner must pay themselves - is €250 under Royal & Sun policies, compared to €100 at FBD.

Copies of the home insurance cost survey are available from IFSRA by visiting www.itsyourmoney.ie, phoning its consumer helpline on lo-call 1890 777 777 or from the consumer information centre at College Green, Dublin.