The Central Bank of Ireland (CBI) has written to insurers to highlight the risk of under-insurance in the home insurance market, in light of the impact of inflation on construction costs.

The CBI's review of the home insurance market identified shortcomings in two areas:

  • clarity, consistency and timeliness of communication with consumers, and 
  • the effectiveness of risk management tools in identifying and assessing risk to consumers.

The CBI also outlined its supervisory expectations for insurers who provide home insurance products to consumers, namely:

  1. send a clear communication of the risks associated with under-insurance to policyholders, in a stand-alone, written form;
  2. put in place a clear plan to address the points raised in the letter and send it to the CBI by 28 October 2022; 
  3. ensure the board has appropriate oversight of the plan; and
  4. act honestly, fairly and professionally in the best interests of its customers and the integrity of the market.

Dear CEO Letter - Central Bank expectations relating to the risk posed to consumers of not having sufficient home insurance cover