Cost of home insurance could increase for all, but it would help neighbours

Fine Gael Cork South West Deputy, Jim Daly, has called for an insurance scheme to be established for victims of flooding who are being refused cover due to repeated flooding.

The scheme which would be based on the national solidarity principle, along the lines of that which is used by Motor Insurers’ Bureau of Ireland (MIBI), which provides insurance for victims of uninsured drivers.

“A scheme, such as this would see an additional premium added to existing policies to cover premises that cannot get insurance to cover flood events. Similar systems such as the National Flood Insurance programme in the US and ‘The Cat Nat System’ in France are well established, providing flood insurance to premises that cannot get cover.

“In the US and France the Government has intervened to ensure that all underwriters are committed to a scheme to insure flood risk properties by imposing an additional premium on all policies to protect those who have been denied cover. The time has now come for the Irish Government to initiate a similar scheme here in Ireland.

“The MIBI was established by agreement with the Government and the underwriters of motor Insurance in 1955 in response to the rising number of accidents involving uninsured vehicles. I believe it is now time for the Government to introduce a similar scheme for properties that cannot get flood insurance.

“As a public representative for areas such as Bandon, Clonakilty and Skibbereen, which have all suffered more than their fair share of flooding, the Government must act to protect residents and businesses who are being refused flood insurance. There is a real threat to the future viability of these towns if the recent flooding events are to be repeated. In the event of another flood, hundreds of families and businesses, who have no insurance cover, are in real danger of facing financial ruin.

“The proposal, if supported by Government, would mean an additional cost to all existing policy holders to cover the increased risk to premises in flood prone areas. I believe that the national solidarity principle would be accepted by people in order to protect the homes and livelihoods of everyone in the State.”

*Notes:* • The Motor Insurers’ Bureau of Ireland was founded by agreement in 1955 between Government and Insurance underwriters. These agreements were updated in 1964, 1988, 2004 and 2009. All insurance companies underwriting motor insurance in Ireland must, by law, be members of MIBI and contribute to funding for claims in proportion to their market share. • The French insurance ‘Cat Nat System’: Before 1982, French insurance companies refused to cover damages caused by most natural catastrophes. Following the serious flooding which occurred at the end of 1981, the French Government instituted a unique compensation system for victims of specific major natural hazards officially considered “natural catastrophes”: the ‘Cat Nat System’ (Catastrophes Naturelles). • The US based National Flood Insurance Programme: In 1968, the U.S. Congress established the National Flood Insurance Program (NFIP) to address the nation’s flood exposure and challenges inherent in financing and managing flood risks in the private sector. A three-prong floodplain management and insurance program was created to (1) identify areas across the nation most at risk of flooding; (2) minimise the economic impact of flooding events through floodplain management ordinances; and (3) provide flood insurance to individuals and businesses. The NFIP today covers approximately 5.6 million households and businesses across the country for a total of $1.25 trillion in exposure. Major changes were made to the program in 1973, 1994, and 2004. • According to the Irish Insurance Federation, 98% of people in Ireland can currently avail of insurance cover.

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