Topical Issue re home insurance refusals for Pyrite affected and remediated homes

I thank the Minister of State for taking this issue. I am fully aware of the work the Department and relevant bodies are undertaking to implement the recommendations of the report of the pyrite panel. I acknowledge it is a long and complex process to oversee the implementation of these recommendations, particularly as priority has been given to remediation rather than any other issue. I find it necessary, however, to highlight a particular recommendation in section 22 of the report with regard to home insurance issues that may require a new and more robust approach by Departments.

The report highlighted the discrimination on the part of insurance companies not only against home owners who had pyrite in their homes but also against home owners who have had their homes remediated and the pyrite removed, and I include myself in that category. This is a very personal issue for me as I am one of the 12,500 home owners affected by this issue. The report stated that the panel had been made aware that home owners are facing huge difficulties regarding insurance cover for houses affected by pyrite and some are being refused cover even in cases where remediation work has been undertaken and all pyritic material has been removed. It also states that this is not considered acceptable and should be adequately dealt with by the relevant parties.

The recommendations in section 22 of the pyrite panel’s report include that the Central Bank and the National Consumer Agency should consult Government to address issues with regard to having minimum cover home insurance policies. The second point was that the insurance industry should remove additional restrictions on dwellings that have been certified as having been cleared of pyrite in accordance with today’s certification process by way of the Building Control Act. The third point in that section was that the insurance industry should not withhold standard household insurance cover to dwellings specifically affected.

According to the National Consumer Agency, this issue has been raised by it with the Central Bank and support has been offered if it is to pursue this policy. However, the Central Bank has stated it is not within its control or remit to force insurers to take on particular risks. That leaves home owners in a quandary. The Irish Insurance Federation, a representative body for some Irish insurance companies, has stated that the report has been noted, that it understands a certification process is ongoing, that it is happy to engage with Government and relevant bodies in this process, and that it is awaiting the outcome of this process. In other words, it is sitting on its hands until it is forced to do something and, in the interim, home owners must wait. The implications of this are that until such time as the insurance companies do something, home owners are actively discriminated against even though the terms and conditions in almost all insurance policies protect the insurance companies against pyrite related claims. The standard terms and conditions of any household insurance policy, which I came across today, state: “We will not cover loss or damage arising from faulty workmanship, faulty design, faulty or inadequate drains or drainage systems, inadequate foundations or using faulty materials.”

With regard to the recommendations in the report it is becoming increasingly obvious that regardless of the preconditions included in some insurance policies to protect the insurer, a resolution on this issue is not likely to be reached without Government intervention. For that reason and on behalf of the 12,500 home owners across this State affected by this issue who have had or are in the process of having their homes remediated, I request the Government to address the question of how we can help vindicate these citizens’ rights and protect these property owners. It is our duty and responsibility to do something quickly.

Response from Minister Fergus O’Dowd

I thank the Deputy for raising this very important issue. I want to make it clear at the outset that the Minister for the Environment, Community and Local Government has no regulatory or oversight role in this specific area. The Financial Services Ombudsman is the statutory authority with responsibility for dealing with these complaints, and I would encourage home owners with a complaint about refusal of household insurance cover to contact that office.

Home owners who have had their homes remediated have been through a difficult and stressful process. However, following completion of remediation works and certification that their homes have been fully remediated in accordance with best practice, it now appears that they are being presented with a further obstacle. While I do not know the extent of the problem it is unacceptable, even if it is only happening to a small number of people, and is a cause of concern. I do not understand the basis on which an insurance company would refuse home insurance for dwellings which have had pyrite remediation works undertaken involving the removal of the pyritic material and the works having been certified as being removed.

The pyrite panel stated in its report that it had been made aware that some home owners faced difficulties in obtaining insurance and in some cases were being refused cover, even in cases where the dwelling had been remediated and all the pyritic material removed. The panel considers this practice to be unacceptable and both the Minister, Deputy Hogan, and I agree with that view. One of the recommendations in the pyrite panel report which deals with home insurance issues recommends that the insurance industry should remove any additional restrictions on dwellings that have been certified as having the pyritic material removed and that standard household insurance cover should not be withheld for dwellings specifically affected by pyrite.

In correspondence with the Irish Insurance Federation, IIF, in October 2012, the Minister, Deputy Hogan, indicated that he would be seeking its engagement in advancing the recommendations in the pyrite panel report dealing with general and home insurance issues. He also raised with it the issue of refusal of insurance to home owners who lived in estates where pyrite might be a problem but whose own dwelling may not be affected. In its response the federation indicated its willingness to engage with the Minister. The Department of the Environment, Community and Local Government will be pursuing this matter shortly with the IIF and the appropriate regulatory body.

Response Alan Farrell TD

I thank the Minister of State for the response; it is appreciated. As he stated, the insurance industry representatives will make themselves available to discuss this matter with the Department. However, home owners such as those who contacted me in recent weeks are unable to shop around for insurance, as most consumers do when their renewal comes up. A lady who contacted me yesterday evening was in a position to save over €500 on her home insurance policy but was unable to move to that insurance company because when she rightfully divulged that her property had pyrite in the past but had been repaired, the insurance company said it was sorry but it does not insure properties which have or have had pyrite. That is unacceptable because in most if not all home insurance policy clauses there is a specific clause which relates to the usage of faulty materials, faulty workmanship, a faulty design, etc. In other words, the insurance companies are already protected and therefore they are actively discriminating, and it is interesting that the previous Topical Issues matter was on the subject of discrimination. This is another form of discrimination by a body corporate against home owners, private individuals who are unable to shop around and get a proper insurance quote. In some instances they are unable to get any insurance. It must be remembered that there is no obligation to have home insurance, but it is important that people have it.

Notwithstanding that the terms and conditions already exclude pyrite related issues in properties, I presume the insurance companies are worried about the administrative cost of turning down pyrite related claims. There are 12,500 homes allegedly affected by this. I ask the Minister of State, in the strongest possible terms, to ensure that everything possible is done on this matter as quickly as possible because the individuals to whom I refer have gone through an horrific process, as the Minister of State rightly pointed out. This is a continuation of that and it is unfair.