Insurers to be quizzed over hiking costs for homes based on location

Insurance representatives have agreed to question firms over claims that the cost of cover for homes is being hiked up or denied because properties are being assessed mainly according to their location.

Firms were also accused of raising quotas and ignoring the latest information on remedial works carried out across the country after a host of recent floods.

TDs said a system of “geocoding” used by insurance firms was worrying homeowners attempting to get cover for properties.

The concerns were raised by members of the Oireachtas joint committee on the environment with the Irish Insurance Federation (IIF).

Committee chairman Ciaran Lynch claimed half of Cork homes and a large number of Dublin homes were being refused cover because of geocoding.

Areas where homes were covered before were now being “stripped” of insurance entitlements, he said, and many properties could also not be sold by owners because of the refusal by firms to grant cover.

“A code of good professional practice with regards to the problems that arise from geocoding must be examined. Insurance companies must recognise the remedial work carried out to prevent flooding, subsidence, or storm damage by extreme weather when they geocode those areas for insurance risks,” he said.

The Labour Party’s Kevin Humphreys claimed firms were ignoring advice from the Office of Public Works among others about where risks of flooding had been reduced.

“Some can’t sell their houses or get cover. That’s what happening on the ground. They’re refused or [their quotas] doubled,” he said.

Mr Lynch called on the industry to examine a code of practice for assessing homes, to set up an appeals process, and to encourage firms to respond in full when policies were denied.

IIF chief executive Michael Kemp agreed to ask member firms about the alleged use of geocoding.

The IIF said it estimated that only 2% of policies have flood cover excluded.

Meanwhile, Fine Gael senator Deirdre Clune criticised the lack of clarity on the situation for those affected by the Cork floods in 2009.

Figures provided by the IIF yesterday show that the Cork floods in June led to 1,260 claims costing €54m.