Tens of thousands of homeowners could find themselves without cover for certain flood damage after one of Ireland’s largest insurers pulled the plug on cover for future claims.
Zurich, which provides protection for about one in seven Irish homes and businesses, has moved to exclude any damage caused to buildings or contents by “water backing up from any sewer, drain or ditch, or any surface water run-off” from future claims.
The news comes as Ireland braced for Storm Amy, which Met Éireann warned could bring the threat of floods to the southwest of the State. Fourteen counties are subject to rain warnings.
Zurich is the third largest player in the property insurance market in the Republic according to Insurance Ireland, with policies covering property accounting for close to 40 per cent of all its business here.
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The other big general insurers in the Irish market continue to provide general cover for flood damage under their policy documents. Allianz, for instance, which is the biggest player in the Irish property insurance market, notes: “Your policy covers flood damage to the premises which occurs from a sudden and rapid build-up of water on the ground level which comes from an external source and/ or an extremely heavy or persistent downpour of rain.”
Zurich has been including notice of the changes in standard letters that are sent out to customers in advance of policy renewal.
But brokers say many clients are unlikely to realise the import of the new wording – not least as the exclusion is not mentioned under the section of the dealing with flood damage but under another section dealing with leaks from burst pipes in the home.
“People will think they are covered if they get flooded, and they are not,” said one.
Zurich insisted that it was merely clarifying language that was “somewhat ambiguous” and that there was no change to the cover provided.
“The purpose of the clarification within the policy wording was to explain the difference between flood and escape of water claims, and is consistent with how we have historically categorised claims,” the company said. “Our objective was to provide greater clarity to our customers, and there has been no change to our approach to claims handling. Therefore, there is no impact to any customers from this wording update.”
However, in correspondence seen by The Irish Times to a customer, the insurer notes: “Regarding flood cover ... in the event of a claim of the following ... water backing up from any sewer, ditch or drain or any surface water runoff, whether resulting from storm or otherwise, this is no longer covered.”
And while the insurer stressed in that letter that it was not removing flood cover in general from its policies, it does add that “this specific aspect of flood cover is not within the scope of flood cover any longer”.
