Ireland proposes €24 household levy for flood insurance fund

Insurance Ireland has put forward a proposal for a new €24 per household levy to create a "sustainable flood insurance fund." This initiative aims to tackle what the group calls "Ireland's flood insurance protection gap," a growing concern as climate change increases flood risks.

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Ireland's flood insurance protection gap

The report, representing insurers, suggests this fund would ensure households in higher-risk areas can still access flood cover, which is becoming increasingly unavailable. Insurance Ireland also noted that the government could potentially rebalance existing insurance levies, meaning the new proposal might not result in a significant net cost increase for the average household.

Central Bank research indicates that approximately 5% of households already struggle to obtain flood cover. Beyond insurance difficulties, affected homeowners can face challenges securing mortgages or selling their properties. To mitigate these issues, Insurance Ireland also suggests establishing a scheme to enhance home resilience to flooding, supported by grants and a new flood performance certificate, similar to the Building Energy Rating (BER) system.

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with broadly no net additional cost to the average household

Further recommendations include promoting more "responsible and resilient" housing developments, particularly in high-risk areas, and maintaining investment in major flood defenses. The group advocates for better coordination and information sharing regarding flood risks. They propose a dedicated flood agency to oversee the framework, including fund administration and flood-risk assessments.

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beyond what the current market can absorb

Moyagh Murdock, Chief Executive of Insurance Ireland, emphasized that flooding is no longer solely an insurance problem. "It is a housing, climate resilience and financial stability challenge that requires a coordinated national response," she stated. She highlighted the profound consequences for homeowners unable to secure flood insurance, impacting their financial security and ability to obtain mortgages.

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no longer solely an insurance issue. It is a housing, climate resilience and financial stability challenge that requires a coordinated national response.