Previous convictions can affect your house insurance claims
Published 01/08/2016 | 20:07
We're used to insurance premiums rocketing these days unfortunately, and often believe insurance companies are out to pile on the charges while refusing to pay out claims.
Car insurance comes in for the most ire, but some recent callers to Joe Duffy's Liveline radio show also complained about their house insurance after finding out they weren't covered due to previous criminal convictions.
What has that to do with insuring against a leaky pipe or a fire? Well, insurers, along with asking all kinds of questions about the type of house and alarm systems you have, also take into account what they term "moral hazard". They are reluctant to insure people whom they believe to be of shaky character. They may not come out and say it, but it's definitely a factor. A conviction can have a serious impact on your premium.
It might seem unfair, but it can hit even those with very old convictions. One caller spoke of being unable to get cover 18 years after a suspended sentence for a fight. Another caller, whose husband is in prison and obviously not living in the house, had her claim for water damage refused.
Insurers design application forms around "material fact" - that is, anything they consider important in assessing a premium. The fact that you may not think it's relevant isn't the point, so it's vital to answer every question accurately even if it results in an extra premium. Failure to do so can mean they simply won't pay out when the time comes.
I asked Deirdre McCarthy of InsureMyHouse.ie about filling out the forms. She said there are a number of factors that could affect the premium or even lead to a decline of cover, or part cover, if the proposal form isn't filled out correctly.
Common ones are whether the house has a flat roof and of what material. Is there a home office? This can be considered a commercial business, especially if there is cash on the premises or callers to the house.
A claims history is important to declare too, even with previous insurers. Eircodes have proven useful tools to insurers (which makes them good for something, at least) and properties are now getting proper cover based on exact location.
Occupancy is also important. Is the house rented or unoccupied for any time, apart from normal holidays, or is an extra family member living there rent-free? A room on Airbnb can cost extra too.
Insurance is dear enough without you overpaying unnecessarily. One of the most common ways to hike your premium is by wrongly insuring your house for its resale value, rather than the rebuild costs.
Each year the Chartered Surveyors (www.scsi.ie) issue rebuild costs county by county. In Dublin, it's €117 per square foot, making a small three-bed at 1,000 sq ft, which might sell for €350,000 in some parts of the city, valued at just €117,000 for insurance purposes. That's the maximum that would be paid out in the event of the house's total destruction (with extras for boundary walls, sheds, kitchen, etc, to be added), plus the contents. So it makes absolutely no sense to insure for any more - you won't get it anyway. My top tip is to hop onto their site and calculate your buildings cover now, then make a call to your insurance company any see if you can get your premium down. It worked for me.
Other tips include:
* If you are over 50, or there is someone at home during the day, this can result in a discount;
* Fit a good five-lever mortice lock and window locks;
* Consider a monitored alarm. Although any alarm is better than none, one which automatically calls a monitoring station and/or the gardai makes insurers feel better;
* A dog may be man's best friend, but a yappy, loud one can be an insurance company's pal too. Thieves hate calling attention to themselves, or having your mutt do it.
After all that, you'll want to consider the contents part of the policy. Some lazy insurers "suggest" a percentage of the buildings cover, but this is often far more than you need. It's worth doing a calculation yourself by noting all the big stuff - furniture, equipment, clothing (just make a generous "guesstimate").
Most policies have a "per item" limit they will pay out, and it can be as low as €1,000 - which means that art, jewellery, expensive bikes or computers must be listed separately, under all risks, which carries a separate premium. Finally, to ensure a smooth claim, take photos of valuables, with receipts if possible.
As our table shows, don't be afraid to shop around. All insurers are different, and your property is unique.