Tuesday, February 11 14:22:52
A Flood Fund, something along the lines of the Motor Fund, which helps drivers hit by losses not covered by insurers, could be introduced by the Government, according to a leading broker.
With up to 100,000 families being forced to go without flood cover, www.insuremyhouse.ie, it could be financed out of the insurance levies collected by the State over the past 20 years and are presently pegged at 5pc of insurance premiums.
Jonathon Hehir, Managing Director of Insuremyhouse.ie contends that standard insurance policies are expected to cover losses where there is an outside possibility that a loss may occur.
"Where that possibility becomes almost a certainty, then a different type of compensation arrangement needs to be established. Insurance is based on the principle where a group of people pool their resources to fund the losses of an unfortunate few. The same principle applies to central taxation where a proportion of the wealth of many is transferred to those less well-off - so the Government simply cannot wash its hands in this case and say that there is no precedent for assisting those with flooded homes and businesses," he said.
"The Government insists that it cannot intervene with a subsidy scheme because it would risk being "a huge and open-ended burden on the taxpayer" - nor can it 'oblige insurance companies to provide flood cover.', so I think we now need to put it to the Government as to why a Flood Fund based on the workings of the current Motor Fund and funded out of the current insurance levy would not be feasible?"
"My answer would be that it is feasible and that the Junior Finance Minister, Brian Hayes was wrong when he said last week that setting up some form of indemnity scheme where the State, in cooperation with insurers and policy-holders, would help fund cover was not practicable. The fact is that similar measures have been established before and there's no reason that a Flood Fund cannot be established now using some of the millions collected in the 5pc tax levy on everyone's insurance policies. It can't all be required for Quinn Insurance losses, particularly now that business has been sold off," said Mr Hehir.