Despite record unemployment and dramatic price cuts across Irish sectors, home insurance premiums in Ireland have soared.

Such premiums have ballooned 25%, to which consumer watchdogs in the country have accused insurers of “crucifying” customers with “totally outrageous” prices, especially as the cost of rebuilding damaged homes fell by 5%.

The rise has caused great criticism from all sides. The National Consumer Agency (NCA), is in discussions with Ireland’s financial regulator pushing for an investigation into why insurers have pushed up premiums.

James Doorley, chairman of the Consumer Association of Ireland, blasted the hike in premiums as “outrageous and unjustified” and Ann Fitzgerald, NCA chief executive, said she is “very concerned” by the premium increases.

The Irish Insurance Federation (IIF) however, defended its actions by stating the bottom line on home insurance claims increased 56% last year due to widespread flooding in August 2008.

“The main thing is that premiums are dictated by the cost of meeting claims, so if those rise, so do premiums,” said IIF spokesperson Michael Horan.