Homeowners in risk areas may lose insurance

HOMEOWNERS living in areas subject to subsidence and flooding could find they are unable to get house insurance as companies refuse to offer cover.

Insurance firms lost an estimated €160 million last year in home insurance cover and homeowners now face serious issues as firms begin to take a more cautious stance against insuring homes in certain areas.

The problem is especially prevalent in Cork, where subsidence and lately flooding have become major issues.

Director of general services with the Irish Brokers Association (IBA), Brian McNelis said: “Companies are taking a more serious view of home insurance. They won’t insure against something that is going to happen.”

He said in Cork there are about 10 to 12 areas where some companies are refusing to offer home insurance because these places are subject to subsidence.

“It’s mainly with houses that are 25 years or older and it’s a serious issue. It is happening around the country, but mainly in Cork,” he said.

If a homeowner cannot get insurance then this could throw up serious issues for their mortgage provider, who will generally insist that they have home insurance.

Chief executive of the Irish Insurance Federation (IIF), Michael Horan said insurance companies might be reluctant to take in new business in high-risk areas.

“Companies will look at their portfolio of risks and if the claims costs are too high in an area they will either increase premiums or reduce exposure,” he said.

“If they feel a very high exposure they may be reluctant to take on new business,” he said.

Mr Horan also said premiums could rise next year as they are dictated by the cost of claims.

The IBA also expects home insurance premiums to increase next year by at least 10%.

A spokesman for FBD said it continues to quote for house insurance in all parts of the country.

It did however say that any new policies taken out until November 29 will exclude storm and flood cover during that period.

“We will review the situation in the meantime. This is a logical position to take for any insurer in the current circumstances.

“Our existing large base of customers who have the cover are protected in the event, or threat of, flooding. And they are our primary concern.

“It would be unwise to offer the cover to new customers at this time as it is impossible to size the risk involved due to the current weather conditions,” he said.

A spokeswoman for Quinn Direct said: “For home insurance we do not have a blanket ban on any particular area of the country, but we evaluate whether to offer cover for properties in areas with a history of subsidence or flooding on a case by case basis.”

* The IIF’s helpline can be contacted at 01-6761914 or they can be emailed at [e-mail].