Homeowners warned of higher premiums as rebuild costs rise
Published 09/07/2015 | 02:30
The cost of rebuilding a home has gone up, prompting warnings that homeowners may end up paying more for insurance.
Homeowners were advised to review their level of cover as there is now a risk that many will be under-insured, experts said.
Head of the Irish Brokers Association Ciaran Phelan said: "The fact that the cost of rebuilding a home has gone up, if there is something like a fire, means that many people will have to review their level of cover."
Mr Phelan said many people had mistakenly insured their home based on its market value during the property boom.
They had since realised they need to insure the home based on what it cost to rebuild it, but are highly likely to now be under-insured.
He was reacting to a new study from the Society of Chartered Surveyors Ireland which shows that the national average home 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 the location.
And new building control regulations mean it is more expensive to rebuild a home that was constructed a number of years ago.
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.
Andrew Nugent, president of the Society of Chartered Surveyors Ireland, said: "The key for homeowners is to check that their house rebuilding costs - the reinstatement costs involved in rebuilding a house in the event of a catastrophe such as a fire which are required on all home insurance premiums, are adequate and fully in line with current figures."
He said homeowners need to check the "sum insured" on home insurance premiums to ensure they are fully covered and not over or underpaying.
Michéal Mahon, chair of the society's quantity surveying professional group, advised homeowners to download the 2015 House Rebuilding Cost Guide from the SCSI website or to use the online house rebuilding cost calculator available for free on www.scsi.ie.