Flood-hit Cork families may face loss of insurance cover

Cork families hit by flood damage for the third time in four years are almost certain to see their insurance costs hiked again — and could be barred from insurance coverage completely.

The Irish Insurance Federation said the situation was possible after last week’s latest flooding crisis.

Areas such as Blackpool in Cork City had been effectively submerged by torrential rainfall.

And, coming in the wake of similar problems in Nov 2009 and Aug 2012, the federation warned it could not guarantee households in certain areas would continue to be covered by insurance companies.

The umbrella group’s manager of non-life insurance, Michael Horan, said insurance firms only provided cover when it was financially sensible.

He said the Nov 2009 floods cost companies €54m and last year’s repeat occurrence another €96m — meaning that some insurers may now refuse to renew coverage in certain flood-hit locations.

“It’s about risk assessment. If you are in a location where flooding is so likely it is inevitable, then it becomes economically unwise to continue cover in pockets of areas. Some people will pay higher premiums because of the flooding incidents, but others may be told this is too high [for insurance firms to continue to offer coverage].”

The IIF has noted that, since the Nov 2009 Cork floods, companies it represents have lost more than €500m as a direct result of paying out for flood damage on homes and businesses.

In Cork alone, the figure for the four-year period is close to €150m.

However, while insurers insist this means they may not be able to continue to cover certain areas, those affected by previous floods in Cork have repeatedly claimed they have not been adequately protected from floods their policies were meant to cover.