Tuesday 27 September 2016

Home insurance policies could be next for a hike this year

Published 09/08/2015 | 02:30

'The key for homeowners is to check their house rebuilding costs are adequate - the costs involved in rebuilding a house in the event of a catastrophe such as a fire'
'The key for homeowners is to check their house rebuilding costs are adequate - the costs involved in rebuilding a house in the event of a catastrophe such as a fire'

There is every likelihood that homeowners will be hit with higher premiums for home insurance this year.

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The insurers have their excuse in the form of higher costs for rebuilding a property in the event of a fire or some other catastrophe.

However, another reason your home insurance could be going up is to do with the motor side of insurers' business, as firms try to make up for losses they have racked up.

This situation means is it vitally important you review your home cover. You need to make sure you are not under-insured if it now costs more to rebuild a home.

But you also need to ensure you are not sleepwalking into paying a higher premium on your home cover because your insurer has lost money on motor cover.

The Society of Chartered Surveyors Ireland has found the national average rebuild costs have increased by an average of 4pc this year.

Its Guide to House Rebuilding Costs, which is used by homeowners to calculate the rebuilding cost of their home for insurance purposes, shows that costs vary significantly depending on location.

In Dublin, the average rebuilding costs on a standard home increased by 3pc. For a standard three-bedroom semi-detached house, that means it now costs €178,000 to rebuild it.

The average minimum rebuilding costs for a standard house in Cork and Limerick increased by 5pc.

The key for homeowners is to check their house rebuilding costs are adequate - the costs involved in rebuilding a house in the event of a catastrophe such as a fire.

Homeowners need to check the "sum insured" on home insurance premiums to ensure they are fully covered and not over or underpaying.

Insurance companies won't automatically increase the sum insured. It is up to you to instruct them to do so.

Remember, that if you are under-insured you will be out of pocket if you have to make a claim.

But do not be one of the many who accept a higher premium. The insurer is likely trying it on, knowing that many will pay up without question.

You could still be under-insured even if you pay the higher premium if the rebuild cost is too low. This is incredibly unfair.

The Law Reform Commission has shown that insurance contracts are riddled with anti-consumer provisions and clauses.

We have yet to hear a commitment from the Government to do something about this.

Insurers have enough advantages over consumers. Do not make it even easier for them.

There is a rebuilding costs calculator at www.scsi.ie.

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