Michael Noonan ‘shutting door’ on firms’ hopes of flood cover

The Government has been accused of “shutting the door” on the chance for thousands of businesses and homes in flood-hit areas to get insurance cover even when flood prevention measures are put in place.

Fianna Fáil’s Michael McGrath said Finance Minister Michael Noonan was letting insurance companies continue to decide in all cases whether or not cover would be given, even though, where extensive relief works had been carried out in the likes of Mallow and Clonmel, cover was still not being provided.

Mr McGrath had asked the minister whether he would introduce a scheme where, following the completion of a flood alleviation scheme to the required standard, insurers would be obliged in law to reinstate flood insurance cover there. He also asked if the State should share in the risk for a defined period, immediately following the works’ completion.

Mr Noonan said the insurance provision was a commercial matter and he could not direct firms to provide flood cover to individuals.

He said the Government’s approach was to address the underlying problem through appropriate remedial works, prioritising spending on relief measures in those areas of greatest need, including areas where the insurance industry was finding it most difficult to provide cover.

The other approach was to ensure information was passed from the Office of Public Works to the insurance industry on completed OPW flood defence schemes “to facilitate, to the greatest extent possible, the availability to the public of insurance against the risk of flooding”.

However, Mr McGrath accused Mr Noonan of reverting to the standard answer by saying it was a commercial matter for insurance firms. He said Mr Noonan’s answer showed he was not prepared to get involved.

Mr McGrath said the Government had the option to legislate to direct companies to provide cover once works had been completed to required standard or could enter into a share of the risk. “I am very disappointed with Mr Noonan’s response,” he said. “It shuts the door on both those options.”

Mr McGrath pointed to the example of Cork City, where many traders had no cover. Those who want to get loans to expand their business were unable to do so because insurance cover was a requirement. He said tens of millions of euro will be spent on the flood defences for the city centre next year, but even when complete there is no guarantee that cover would follow.

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