Enda Kenny: No levy to pay for flood insurance

The Government looks set to defy calls to levy households to help those who have been unable to get flood insurance.

That is one of the key recommendations of the Oireachtas environment committee which is to publish a report today into the issue of flooding and insurance.

The report comes as Environment Minister Alan Kelly announced that he will provide local councils with €8m to pay for the clean-up after Storm Desmond.

Thousands of homes and businesses have been unable to get insurance because of previous flood events.

Aerial footage shows extent of floods in Cork, 'above normal' levels of rain forecast this… https://t.co/V4em5FMKPq pic.twitter.com/pXa12GQTOp

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Taoiseach Enda Kenny has said that while a solution will be found, it cannot result in extra costs for households. “Clearly we’ll look at this, and I want to make it clear the Government have no intention of putting further levies on householders for insurance schemes.”

However, Mr Kelly said the issue of applying a levy or taxation on homeowners to help those affected “will be carefully considered”.

“People in areas that didn’t flood who can’t get insurance. That is not acceptable to me,” said Mr Kelly.

“Firstly we have to quantify this. Who pays for it and how will take careful consideration, whether its levy or taxation or its either or.”

Clean-up of floods will cost millions of euro says minister https://t.co/r7FHZ2DtM8 via @Junomaco (DOD) pic.twitter.com/1ri7OOZ8f0

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There are already two levies on insurance policies: One dating to the windup of the Insurance Corporation of Ireland in the 1980s and the other from the demise of Quinn Insurance after the 2008 financial crash.

The committee’s report will also call on the Central Bank to conduct a “systematic investigation” of the practice of geocoding, which has resulted in property owners being refused cover, or hit with premium hikes, even though their property has not been flooded.

The committee chairman, Labour TD Michael McCarthy, said the committee was clear that flood cover should be available to all, but he said it had become apparent during the hearings that there was no perfect solution to what is a complex issue.

Limerick and Athlone brace for more floods https://t.co/uVD4K1dx4M pic.twitter.com/qMKNS9sQOw

— Irish Examiner (@irishexaminer) December 14, 2015

“The legal route should be a last resort measure considered only if all other potential solutions have been exhausted,” he said.

And while a levy on insurance premiums — based on a UK scheme which sees households pay a £10.50 (€14.46) levy to provide a flood fund — is one recommendation, Mr McCarthy said he would have concerns about such a move until other measures had been tried.

“I would be wary about piling another cost on people who are cash-strapped as it is,” he said. “A levy like this is effectively a ‘get-out-of-jail card’ for the insurance industry.”

The OPW said the State has invested considerably in flood defences which now protect 5,000 properties. It estimated the benefit in terms of damage and loss avoided was in the order of €900m.

Mr Kelly said claims of €6.2m have so far been received from councils and the final cost is likely to run to tens of millions.

Fianna Fáil transport spokesman Timmy Dooley urged the move during a tense Dáil debate in which he advised a Government minister not to show up at affected areas, as it it the last thing victims need.