Midleton businesses left in limbo as insurance companies fail to pay out

Cleaning up at Lollipop Kids on Main Street, Midleton, Cork after last month's flooding. While many of the town’s businesses have reopened and are trading again, they are still counting the cost of the clean up, and the damaged and lost stock. Picture: Dan Linehan

Up to 30 businesses in Midleton are in limbo as insurance companies are “treating them with absolute disdain” by stalling payouts on policies following the damage caused by Storm Babet.

Just over a month has passed since catastrophic flooding hit the town after a month’s worth of rain fell in just 24 hours.

While many of the town’s businesses have reopened and are trading again, they are still counting the cost of the clean up, and the damaged and lost stock.

Most of the businesses in the town cannot get insurance due to the town’s flooding history, though there are some who have been able to get quotes and pay hefty annual premiums in recent years. Despite paying their premiums, those businesses claim they are now being stonewalled as they attempt to claim on their policies following the storm.

Some have been told that their policies did not actually cover flood damage, while others have been told they must pay sums ranging from €10,000 to €40,000 as part of the excess before their claims will be evaluated. Excess is the first part of a claim that must be paid by the policy holder while the insurance company pays out the balance.

Others say they are having difficulty as the weeks go by receiving so-called interim payments, which are holding payments to cover part of the costs as the claim is further evaluated.

The businesses in question do not qualify for the emergency fund set up by Government and distributed by the Red Cross in the aftermath of the flooding. That fund is only for businesses who cannot get insurance.

Local TDs David Stanton and James O’Connor have called on insurance companies to resolve the issue.

Mr Stanton said insurance companies “should be looking to proactively assist businesses who have been through enough”, while Mr O’Connor said some businesses “have been treated with absolute disdain”.

Mr O’Connor has raised the matter with Finance Minister Michael McGrath, who in turn raised it with Enterprise Minister Simon Coveney, whose department is heading up the emergency flooding response schemes. Mr O'Connor said:

Some businesses who have paid insurance premiums are entitled to less than those who have no cover. That is wrong. Some insurance companies have treated their customers with absolute disdain. The people of Midleton have been incredibly resilient, have made very little noise, and have tried as best they can to get on with things.

“Some businesses caught up in this are wondering if they’ll be able to hold onto their staff much longer because they don’t know how long it will be before they can get back up and going.”

A spokesperson for insurance firm Axa said it is dealing with approximately 30 SME claims arising out of Storm Babet and is “working hard to process the claims as quickly as possible”.

"To date, we have declined two cases, and decisions on these were based on the terms and conditions of the relevant policies. Where a customer is unhappy that their claim has been declined there is a complaint process which can be instigated by the customer.“We are also working to facilitate interim payments for customers where possible. These are possible once our loss adjuster has visited the relevant premises and validated the loss.

"In some circumstances we are finding it difficult to access certain properties due to the unavailability of customers and their representatives, and we are actively seeking to advance these cases,” the spokesperson said.

Axa said it “always seeks to address its engagement with its customers in a prompt and fair-minded manner and are concerned to hear reports that some of our customers are experiencing challenges”.