Question of Finance: How can I tell if I'm overpaying on home cover?
My home insurance policy is due for renewal next month and I noticed on my renewal letter from the insurer that my premium has increased.
I never usually give a second thought to my renewal policy when it arrives -- I usually just pay the premium and forget about it for another year. But I was discussing this with my neighbour and he said that because the rebuild costs have decreased, so, too, should my insurance premium. I want to make sure I'm not paying over the odds for my cover. Can you advise?
While the reduction in house-building costs is good news for consumers, home insurance rates have gone up over the past two years by at least 20pc.
Therefore, to get any advantage from the reduction in building costs, you must ensure that you review the sum insured on the relevant building itself and amend where necessary.
Insurance companies will not reduce sums insured unless instructed by the homeowner.
While reviewing your policy, however, you also need to take into account whether or not you have made improvements to the building that would increase the level of cover needed. The onus is on you to ensure you have the correct level of cover in place to suit your needs.
We would also advise that you review your contents insurance to check you are not underinsured.
There's no doubt that insurers have tightened their claims procedures of late and, again, the onus is on you to determine the level of cover you need.
Many insurers offer discounts on premiums such as no-claims bonus or if the property is fitted with a house or smoke alarm. You should review what's on offer in the market before making your choice.
- Brian McNelis is director of general services at the Irish Brokers' Association