Consumer Insurance Contracts Act 2019

Limitations on deferring payment of claim until completion of works, etc., in case of property contracts

17. (1) In this section—

“claim settlement amount” means, in respect of a relevant claim—

(a) unless paragraph (b) applies, the amount that is payable under the relevant contract of insurance to the consumer in respect of damage to property, the subject of the claim, or

(b) an amount in respect of such damage that the insurer states to the consumer that—

(i) the insurer is willing to pay to the consumer, based on an estimate of the cost of the repair, replacement or re-instatement work involved, and

(ii) the payment of which (if the consumer agrees to such) will constitute the discharge of the insurer’s liability under the contract in respect of the claim;

“relevant claim” means a claim under a relevant contract of insurance in respect of damage to property covered by the contract;

“relevant contract of insurance” means a contract of insurance that provides insurance in respect of damage to property (whether in addition to other matters or not).

(2) This section applies to any provision of a relevant contract of insurance under which the insurer, in respect of a claim settlement amount, is not obliged to pay the full amount thereof unless and until the following conditions are satisfied, namely, the repair, replacement or re-instatement work involved has been completed and specified documentation, in respect of such work, has been furnished to the insurer.

(3) In relation to a provision to which this section applies—

(a) the provision shall be void unless, prior to the commencement of the relevant contract of insurance, the provision is brought to the consumer’s notice, on paper or on another durable medium, and in terms that are clear and unambiguous,

(b) notwithstanding that paragraph (a) is complied with but without prejudice to paragraph (c), the insurer shall not invoke the provision in respect of a relevant claim unless, at the time of the making of the claim, the provision is brought to the consumer’s notice on paper or on another durable medium, and

(c) the provision shall be construed and shall operate as being subject to the following limitation, namely, the amount of the claim settlement amount, payment of which may be deferred to the time the conditions referred to in subsection (2) are satisfied, shall not exceed—

(i) 5 per cent of the claim settlement amount - in a case in which the claim settlement amount is less than €40,000,

(ii) 10 per cent of the claim settlement amount - in a case in which the claim settlement amount is €40,000 or more.