Last winter’s severe flooding saw hundreds of policy holders greatly affected both emotionally and financially. Luckily, the vast majority of these policy holders had cover in place and could look forward to prompt settlement to get them back on their feet. Or so you would think. Five months on from the floods, Fianna Fail Galway West T.D. Frank Fahy is threatening to name and shame the insurance companies who he accuses of “penny pinching” and making “inadequate responses” to flood victims.

In Cork, one of the worst hit areas, 300% increases in premiums on renewal have been reported by flood victims alongside the refusal of flood cover in the future. The St. Vincent de Paul has recently warned the Insurance Ombudsman of Ireland that insurance companies are refusing to pay out full claims and are delaying payments to policy holders in Galway, Cork and Clare.

So what is going on? Why are hundreds of people around the country being treated in such a manner?

Well, in an effort to remain fair and balanced we have to take into account that the insurance companies are dealing with an unprecedented number of claims. 8,500 according to the Irish Insurance Federation (IFF). These claims relate only to the floods and do not include the estimated €247m worth of claims arising from the big freeze in early January. So the insurers are up to their eyes in it, but does this justify the delay in payment and its knock on effects for policy holders?

In a word, No.

Insurance companies, like many other large organisation have the advantage of holding all the cards. Let’s look back at the establishment of the Personal Injuries Assessment Board, which was established in 2005 to help bring down motor insurance prices. The board was set up, cost of processing claims fell sharply, motor insurers profits peaked and premiums very slowly dropped. The current crisis has many parallels, but the advantage is being held once again by the insurers.

This time around the insurers are delaying payment in many cases whilst increasing premiums by up to a factor of 3 in some cases. In the mean time, many loss assessing firms and insurance brokers are coming under increased pressure from customers and policy holders cannot get their lives back on track.

There is an imbalance in the relationship between insurance companies and their policy holders that has to be addressed. In November of last year, President Mary McAleese made an appeal to those with the power to make life easier for flood victims to respond swiftly, we are still waiting.