Thursday 23 February 2017

Fall in build costs sparks call for reduced premiums

Charlie Weston Personal Finance Editor

HOUSEHOLDERS have been urged to secure a reduction in their home insurance after it emerged that there have been decreases of up to 20pc since 2008 in the cost of rebuilding the average house.

The cost of replacing a three-bed semi-detached house has plunged by one-fifth since the start of the downturn, a new study shows.

The Society of Chartered Surveyors (SCS), which compiled the survey, said the findings should lead to a reduction in house-insurance premiums across the market.

It now costs €244,500 to rebuild a 1,500 sq ft three-bed semi-detached house in Dublin, down from €306,000 in 2008. This is a fall of 21pc. This general pattern of price falls was repeated in other cities, although there were some regional variations.

The chairman of the quantity surveyors' division of the SCS, Micheal O'Connor, said that homeowners should ensure these latest rebuild costs are reflected in their insurance premiums.

Home insurance premiums tend to be made up of the price of replacing the home, and the cost of replacing the contents.

In Cork, rebuilding a three-bed semi-detached house, which is 1,500 sq ft in size, has dropped to €162,636, down from €222,000 in 2009. This is a fall of 16pc.

In the past year alone rebuilding costs across the country have fallen by 4pc, with the biggest decline in Limerick at 10pc, a copy of the latest SCS research seen by the Irish Independent shows. Galway was down 8pc.

Mr O'Connor said: "This is a guide which is based on average rebuild costs but the latest falls could very well be good news for homeowners and we would urge all of them to go to our website, www.scs.ie."

Renew

The survey, which goes live on the internet on Monday, can be used as a straightforward calculator on a site before consumers renew their house insurance, or if they want to check whether they are paying the appropriate premium.

"While the average decline nationwide is about 4pc, there are quite a few variations, depending on house type and location," Mr O'Connor said.

The greatest price falls were clearly for three-bedroom semi-detached houses, as this is the most common house type and greater cost saving can be achieved as a consequence.

The director of general services at the Irish Brokers Association, Brian McNellis, said that the lower rebuilding costs were good news for households, especially as home insurance premiums had risen by up to 25pc in the past three years.

He warned householders, though, that insurers would not automatically reduce the value of the rebuilding as part of their insurance.

This means it is up to consumers themselves to check whether they are over-insured.

Mr McNellis advised consumers to review their home insurance once a year to make sure the sum insured was the right one, and to ensure they were neither over-insured nor under-insured.

Anyone who is under-insured is unlikely to get the full value of a claim, he warned.

Irish Independent

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