Written answers

Tuesday, 30 April 2013

Department of Finance

Insurance Coverage

Photo of Billy TimminsBilly Timmins (Wicklow, Fine Gael)
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141. To ask the Minister for Finance the position in relation to an insurance company (details supplied); and if he will make a statement on the matter. [20103/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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It should be noted at the outset that neither I nor the Central Bank can compel insurers to quote for business. The decision to provide any specific form of insurance cover and the price at which it is offered is a commercial matter based on the assessment an insurer will make of the risks involved. I understand that insurance companies as a matter of course carry out reviews of the risks that they are prepared to insure against and sometimes make a decision to discontinue certain types of cover which they consider high risk such as homes close to a river which has previously flooded. These types of decisions are made sometimes on the basis of their broad past experience rather than looking at the individual circumstances of householders.

In this regard it should be noted that the OPW has advised me that Bray and its environs has a history of flooding having flooded four times seriously in the last 100 years as well as two other significant events. The last serious flood occurred in August 1986 during “Hurricane Charlie” when over 500 properties were subjected to flooding. They have also indicated that in the severe event which hit the east coast in October 2011, it is understood that areas of Bray were close to evacuation when flood levels in the river began to fall. These may be factors in the withdrawal of cover by insurance companies.

OPW has also advised me that following the Government’s Capital expenditure review for flood relief activities the Bray Scheme was given the go-ahead and a contractor was appointed in February 2012 with works commencing in May 2012. It is understood they are due for completion in late 2014 and that approximately 650 houses along with eight commercial properties are to be protected by the Scheme to a 1:100 year standard. This is a major investment by the State in addressing the flood problems affecting Bray and its residents and businesses. When completed the Scheme will afford a very high level of protection and details of this will be available to the insurance industry.

I am also informed that the OPW and the Irish Insurance Federation have been engaged in discussions to agree a system of information sharing in relation to completed flood alleviation schemes and works undertaken by the OPW or, in certain instances, by local authorities with OPW funding, and where the standard of protection afforded by these works could be verified.

These discussions are aimed at putting in place a process which will provide the necessary reassurance to insurance companies that remedial works have been carried out to a sufficiently high level to enable them re-commence the provision of flood cover in areas which previously have been vulnerable to flooding.

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