Laws forcing insurance firms to provide cover to flood-hit homes and businesses could be introduced next year.
However, the laws will not be able to limit the prices companies impose on those at risk.
A Government minister said that the move may be considered if insurers refuse to adequately explain why they are still failing to provide flood cover in areas where defences are now in place, despite Fine Gael previously ruling out the possibility.
Speaking to the Irish Examiner, junior minister at the Office of Public Works and Independent Alliance TD Sean Canney said that he will contact leading insurance industry groups early in the new year to seek answers on why they are still not covering specific areas.
Officials from the OPW have been in ongoing discussions with Insurance Ireland since widespread damage that was caused by Storm Desmond last winter.
Mr Canney said in areas such as Fermoy in Co Cork, where defences have been built and which did not flood last year, people are not being insured.
Saying that the issue cannot be ignored, the Independent Alliance TD said that he will summon insurers in the coming weeks to discuss the ongoing crisis affecting thousands of homes and businesses across the country.
In a best-case scenario Mr Canney said he hopes that insurers will be convinced of the need to help at-risk communities without the need for any formal intervention by the Government.
However, if necessary, he said that new laws forcing insurers to cover those in need will be considered — despite the fact that “while you can legislate you cannot actually set the premium” for how much people will be charged and that Fine Gael has previously ruled out the possibility.
“It will come to a stage where I take a place like Fermoy and one or two more areas and say ‘look, show me how many houses have been insured there and why you haven’t insured the rest of them’. I will be bringing them in early in the new year.
“You can legislate where you force them to bring in insurances, but you cannot actually set the premium.
“That’s why the Department of Finance are actually loath to interfere because they can’t actually set the premiums.
“They could legislate to force companies and tell them what to do but they cannot say what to charge. You have to be very careful because you don’t want to drive up the price for everyone,” he said.
The OPW currently has 12 major schemes at construction stage in different parts of the country, with a further 23 at design development and planning stage.
A total of €430m has also been allocated for flood-risk management in its Capital Investment Plan for the period 2016 to 2021.
Mr Canney said that he still believes the best way forward is for the Government and companies to co-operate in order to “eliminate fears that are there”.
However, he said that in Fermoy and other areas where demountables (removable flood barrier) were fitted and there were no floods last year, homes and businesses are still unable to get cover, showing further action may be required.
While any future move by Government to force insurers to cover flood- affected areas would be welcomed by those in need, it poses hidden problems due to the inability to limit the charges involved and the potential impact on other households’ premiums.
During a Dáil motion tabled by Fianna Fáil and supported by Sinn Féin, AAA-PBP, Labour, and Independents calling for the same move last month, Fine Gael junior finance minister Eoghan Murphy said that the move could have “the opposite effect than what is intended” and will “undermine the system of cover” in the country.
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