Home and shop insurance experts www.insuremyhouse.ie and insuremyshop.ie said that if its previous call had been heeded and a flood fund, similar to the motor fund run by the Motor Insurance Bureau, had been set up, businesses and homes would have a financial cushion to fall back on.
Recent storms and bad weather have seen places such as Westmeath, Limerick, Clare, Galway, and Cork experience severe flooding.
Last week, Defence Minister Simon Coveney said that small businesses hit by flooding will start receiving payments within the next few days under a €5m government scheme.
However, managing director of insuremyhouse.ie and insuremyshop.ie, Jonathan Hehir, said that if its calls had been heeded last year, there would be more than €25m in the fund to assist in flood relief.
“At the beginning of 2014 we called for this fund to be set up,” he said. “If the Government had taken the required action at the time and put it in place, then the fund would now be worth an estimated €26m and this money could be used to address the serious damage that floods are currently wreaking on homes and business in certain areas of the country.”
Mr Hehir said the fund could still be established by using just 1% of the “massive” insurance levy.
“We can’t keep letting this happen to the same people,” he said. “We need action now. A flood fund can still be established. We are certainly not suggesting an increase in premiums, but instead that just 1% of the hefty 5% insurance levy is redirected to a special purpose fund.”
“This could be managed in the same way as the MIBI fund, which specifically addresses those losses incurred by drivers but not covered by individual motor insurance policies. A new flood fund would have a dual purpose of funding flood defences and assisting affected homes and businesses.”
Standard insurance policies are expected to cover losses where there is an outside possibility that a loss may occur. However, Mr Hehir said that, where that possibility becomes almost a certainty, a different type of compensation arrangement needs to be established.
“Insurance is based on the principle where a group of people pool their resources to fund the losses of an unfortunate few,” he said. “The same principle applies to central taxation where a proportion of the wealth of many is transferred to those less well-off - so the Government simply cannot wash its hands in this case and say that there is no precedent for assisting those with flooded homes and businesses.”