Report of the Joint Committee on Flooding and Property Insurance in Ireland 2015
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Tithe an Oireachtais An Comhchoiste um Chomhshaol, Cultúr agus Gaeltacht Tuarascáil ón gComhchoiste maidir le Tuiliú agus Árachas Maoine in Éirinn, 2015 Eanáir 2016 A leagadh faoi bhráid dhá Theach an Oireachtais 11 Eanáir 2016 ____________________________ Houses of the Oireachtas Joint Committee on Environment, Culture and the Gaeltacht Report of the Committee on Flooding and Property Insurance in Ireland, 2015 January 2016 Laid before both Houses of the Oireachtas 11 January 2016 31ECG019 Tithe an Oireachtais An Comhchoiste um Chomhshaol, Cultúr agus Gaeltacht Tuarascáil ón gComhchoiste maidir le Tuiliú agus Árachas Maoine in Éirinn, 2015 Eanáir 2016 A leagadh faoi bhráid dhá Theach an Oireachtais 11 Eanáir 2016 ____________________________ Houses of the Oireachtas Joint Committee on Environment, Culture and the Gaeltacht Report of the Committee on Flooding and Property Insurance in Ireland, 2015 January 2016 Laid before both Houses of the Oireachtas 11 January 2016 31ECG019 Report of the Joint Committee on Flooding and Property Insurance in Ireland 2015 © Tithe an Oireachtais 2016 / Houses of the Oireachtas 2016 Joint Committee on Environment, Culture and the Gaeltacht Page 1 Report of the Joint Committee on Flooding and Property Insurance in Ireland 2015 CONTENTS Contents ............................................................................................................................................. 2 Réamhra (Preface) ........................................................................................................................... 6 1. Executive Summary ................................................................................................................... 10 2. BACKGROUND TO THE POLICY ISSUES .................................................................................. 18 2.1 Weather-related insurance risks – the global context .......................................................... 19 2.2 Climate change in Ireland in the 21st century ........................................................................ 22 2.3 The Irish insurance market ........................................................................................................ 23 2.4 Irish insurance in the European context .................................................................................. 24 2.5 Issues identified by the Joint Committee ................................................................................ 29 2.5.1 Cost of flooding ....................................................................................................................... 29 2.5.2 Households excluded from flood cover ............................................................................... 29 2.5.3 Problems with geocoding and zoning by insurance companies ..................................... 30 2.5.4 The Insurance industry and remedial works undertaken by the State or policyholders ............................................................................................................................................................. 30 Joint Committee on Environment, Culture and the Gaeltacht Page 2 Report of the Joint Committee on Flooding and Property Insurance in Ireland 2015 3. POSITION OF THE IRISH INSURANCE INDUSTRY .................................................................. 32 3.1 Cost of flooding ............................................................................................................................ 32 3.2 Households excluded from flood cover.................................................................................... 35 3.3 Cost of insurance premiums ..................................................................................................... 38 3.4 The insurance market................................................................................................................. 39 3.5 Profit margins of insurance companies .................................................................................. 40 3.6 Insurance industry’s view of flood risk management ........................................................... 41 3.6.1 Public agencies engaged in flood risk management ....................................................... 42 3.6.2 Criticisms of State flood defence programme by Insurance Ireland ............................. 43 3.6.3 State under-investment in flood defences ......................................................................... 44 3.6.4 Response by OPW on expenditure on Flood Relief works ............................................... 45 3.7 Length of design and planning process for projects .............................................................. 46 3.8 Planning Guidelines on flood risk management 2009 ......................................................... 48 3.9 The Committee’s response to the insurance industry’s position ......................................... 50 3.10 Lack of communication between public agencies and the insurance industry .............. 52 3.11 Insurance industry measures to improve cover ................................................................... 52 3.12 Insurance industry requirements for sustainable provision of insurance........................ 53 3.13 Flood defences: call for the OPW and the property insurance industry to co-operate on design and standards ........................................................................................................................ 54 3.14 Founding of Insurance Ireland - OPW Working Group ........................................................ 55 3.15 Progress of the Insurance Ireland – OPW Working Group ................................................. 57 3.16 Flood maps and CFRAMS (Catchment Flood Risk Assessment and Management) ...... 59 3.17 Flood warning systems ............................................................................................................ 62 4. INSURANCE CLAIMANTS’ POSITION ....................................................................................... 64 4.1 The situation of property-owners excluded from flooding insurance .................................. 64 4.2 Issues arising from geo-coding ................................................................................................. 67 4.3. Competition in the insurance market ..................................................................................... 70 4.4 Insurance claimants’ problems in claiming ............................................................................ 71 4.4.1 Retention of insurance payments ....................................................................................... 71 4.4.2 Failure to advise claimants of right to their own representative .................................... 73 4.4.3 Problems in comparing insurance quotes ......................................................................... 74 4.5. Central Bank findings on household property claims resulting from water damage ..... 76 4.5.1 Response of Insurance Ireland to Central Bank’s findings ............................................. 79 Joint Committee on Environment, Culture and the Gaeltacht Page 3 Report of the Joint Committee on Flooding and Property Insurance in Ireland 2015 5. RURAL DWELLERS’ DIFFICULTIES WITH FLOODING AND INSURANCE ............................. 80 5.1 Farmers excluded from flood cover due to incidence of summer floods ........................... 80 5.2 Summer flooding in the Shannon catchment area ............................................................... 81 5.2.1 Lake water levels.................................................................................................................... 81 5.2.2 Flood warnings ........................................................................................................................ 85 5.2.3 Essential maintenance work on the Shannon ................................................................... 86 5.3 OPW response to evidence given to the Committee on the river Shannon ....................... 88 5.4. Shannon maintenance: silt and trees ..................................................................................... 89 5.4.1 OPW response on Shannon silt and trees .......................................................................... 90 5.5 River Shannon: Solution proposed ........................................................................................... 92 5.6 Provisions for farmers affected by disruptive weather events: case of Argentina ........... 93 6. STATE AUTHORITIES’ ROLE IN FLOOD REMEDIATION ......................................................... 94 6.1 Local authority Flood Remediation works ............................................................................... 94 6.2 Length of time taken to implement Flood Remediation works: local authorities ............ 95 6.2.1 Habitats Directive constraints .............................................................................................. 96 6.2.2 Local authorities and CFRAM ............................................................................................... 96 6.2.3. River management and water level updates .................................................................... 97 6.2.4. Public Procurement Process ............................................................................................... 98 6.3 Role of the OPW (Office of Public Works) in Flood Remediation ........................................ 99 6.3.1 Role and