House insurance increases -- even as rebuilding costs fall
Published 17/08/2011 | 05:00
HOMEOWNERS are paying 6pc more to insure their homes since the start of the year -- even though the cost of rebuilding has dropped by the same amount.
A survey of the average price of combined residential building and contents insurance between January and June reveals that home-insurance costs rose from an average of €466 in the first quarter to €494 by the end of June.
Insurance costs outside Dublin rose even more, from €491 in the first quarter to €518 in the second.
The survey, conducted by AA Insurance, was based on 1,800 quotes from nine insurance providers on a sample of 200 home insurance policies.
But John Curtain, president of the Society of Chartered Surveyors Ireland (SCSI), said average rebuilding costs had fallen between 4pc and 10pc since January.
"We don't know why they've gone up. But we don't see any justifiable reason from a construction point of view," he said.
"The price increases in materials don't outweigh the decreases in labour costs, especially in the residential area."
The Irish Insurance Federation (IIF) representing 62 insurance companies, did not respond to queries yesterday.
However, the federation paid out €173.1m on 24,992 household claims due to burst pipes following last December's big freeze.
Dermott Jewell, CEO of the Consumers' Association of Ireland, said insurance companies were simply passing the buck for their increased payouts on to all consumers.
"You have to ask the insurance companies why, if building costs are down, they are increasing rates," he said.
Mr Jewell said the latest increases rekindled the argument for no-claims bonuses for householders.
"Even if you've never made a claim, you're still being penalised," he added.