Could your house insurance premium be affected by flood damage?

Insurance companies to blacklist areas devastated by floods.

donegal floods

Parts of Ireland, particularly the north-west, were battered with unseasonably heavy rain this week as a result of hurricane Gert on the far side of the Atlantic. Families and firms in these areas that have made or will make a claim to cover the cost of the devastating floods could find themselves blacklisted by insurance companies. Insurers are bracing themselves for a fresh tranche of claims worth millions after thunderstorms and flash floods left a trail of destruction across Donegal and neighbouring counties. Insurance experts said those making a claim to the insurer for damage to their homes, businesses and farms were likely to get a payout. However they face a stark choice as insurers will then decline to provide them with flood cover in the future.

The revelation comes as homeowners and businesses are coming to terms with the massive damage inflicted by the flash floods. People who suffered damage have been advised to employ the services of an insurance assessor to help them detail the cost of the damage. Leading experts within the insurance industry have claimed that insurers were blacklisting locations for homeowners and businesses in any town that had previously experienced flooding. This was even the case where flood relief works have been carried out. 

Jonathan Hehir, of, warned that even those who have not suffered storm damage are likely to be refused flood cover in future if they live in hard-hit areas. "There will be renewal letters arriving in the post saying insurers will no longer offer flood cover." He said that flooded homeowners may as well claim now as they will be backlisted next year due to their location. A spokesman for Insurance Ireland, the representative body for the industry, said that insurers stood ready to help their policyholders and would assess any claims received against the cover in place. "In terms of future cover, as with all classes of insurance, claims history and other factors are taken into account by insurers when assessing the nature of the risk and the likelihood of a reoccurrence," he said. 

At present, flood cover is provided in 98pc of property insurance policies nationally. Insurers had paid out more than €1.3bn in the past 10 years for similar extreme events, the spokesman added. "Insurance Ireland is working with the Government to maintain and increase flood cover in defended areas, where flood defences have been installed, and signed a memorandum of understanding with the Office of Public Works in 2014 on this issue," said the spokesman. This had led to an increase in flood cover in these areas, Insurance Ireland said.

Source: The Irish Independent

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