Should the Irish insurance industry cover floodplain developments?

The Irish Government’s call to the Insurance industry to provide cover for properties located in high flood-risk areas in Ireland is a little surprising. Insurance is a promise of compensation for specific potential future losses in exchange for a periodic payment. The key word here is “potential”. Where the potential is so high that it can be replaced by “inevitable”, it’s not insurance any more – its charity.

So, the suggestion is that the insurance industry should provide charity to the unfortunate individuals who live in areas that will in the future be flooded and indeed be flooded with increased frequency. The justification for this demand, according to the Taoiseach, is the large profits that the industry makes and the view that they should be doing more. Fair enough.

But how did we get here? Planners and qualified professionals in local Government have for years known the areas that are prone to flooding and have in many cases warned against future impacts if development in flood-risk zones took place. In many cases, it was the elected representatives who forced through rezoning and permissions in unsuitable areas – including a certain Councillor McElvaney of Monaghan County Council as reported by Frank Mc Donald in the Irish Times in 2006.

But it hasn’t all been down to councillors. Many planners, under pressure to provide development land for expanding towns have allowed development in flood-zones. Even where flood risk is identified and prevention works stipulated in the conditions, either enforcement or design failings has resulted in the inevitable deluge and damage. Aldi in Ballybofey, for example, where permission was granted in 2013 subject to a requirements for embankments was under-water by December 2015.

Location Intelligence technology is now developed in Ireland to a degree that insurance companies can tell quickly where a risk address is, and whether there are any significant environmental risks associated with the location. Flood risk models developed by private specialist companies such as JBA Risk and public models created by the OPW, can offer a fairly good prediction of the likely frequency (return period in years) and depth of flooding for any location in Ireland. Using accurate digital terrain and hydrological models, they can predict whether the floodwaters will come from rain, river or sea.

Add to this a fast and accurate address location engine (such as Autoaddress) and insurance companies can tell at quotation stage whether you live in a seasonal pond or on a hill. Often the name of the townland in the address can reveal local information which wiser generations have used, such as Pairc-na-big-flood-happens-here-all-the-time, Co Limerick. Historic Ordnance Survey maps also show floodplain areas known at the time, so in most cases the problem isn’t a dearth of information, just a lack of willingness to act on it.