Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 15:

In page 14, line 19, to delete “less than €20,000” and substitute “less than €40,000”.

These amendments relate to section 16, which deals limitations on deferring payment of claim until completion of works, etc., in the case of property contracts. In essence, it relates to amounts being retained by insurance companies pending the completion of works and the furnishing of relevant documentation, invoices and so forth.

According to the research I have done, my understanding is that this practice of retaining payments in the case of household insurance property damage claims has only arisen in the past ten years. It grew out of commercial insurance policies initially where the amount retained was regarded as the difference between the reinstatement value and the indemnity value, namely, the value at which the property had been insured. In many cases, the amounts retained ended up being a saving for insurance companies because individuals sometimes found they might not be in a position to furnish documentation to the satisfaction of the companies.

This relates to cases where there is a claim settlement amount. The amount that has to be paid in total is agreed following a process. The insurance company appoints a loss adjuster. The policyholder may well have his or her own loss adjuster. That is good practice, particularly for significant claims. There is then engagement between the insurance company and the policyholder, with the amount agreed. By further restricting the amount that can be retained by the insurance company, it will not be out of pocket because the liability is agreed.

The thresholds are set in the Bill as 5% of the claim settlement amount in a case in which the amount is less than €20,000 and 10% in a case in which it is €20,000 or more. Raising that figure to €40,000 is reasonable and is appropriate under the circumstances.

It is a pro-consumer amendment, and I make no apologies for it. We are coming at this from the perspective that the claim amount is agreed. The insurance company has signed off on the amount that must be paid. This is more about timing. I have seen individual cases where excuses were used and the full amount was not paid out. In some cases, it was never paid out. That is not good enough.

I hope the Minister of State and Deputy Pearse Doherty will see fit to support this amendment.

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