Friday 20 April 2018

Facing the storm of home insurance costs

Insurance companies face big payouts over storm damage
Insurance companies face big payouts over storm damage

The cost of the recent storm damage could run into hundreds of millions of euro. It stands to reason that if the volume of home insurance claims goes up as a result, so too will the cost of premiums.

Fortunately, new insurers came into the market in recent years and, as they have not been hit by flood claims over the last two or three years, their premiums will be lower.

Homeowners, however, need to be vigilant when it comes to household spending. When it comes to home insurance, they need to know how to weather the storm. Here are eight ways.

1 Where people make errors with home insurance is in the valuation -- either of the property or contents.

Over- or underinsuring your home can land you in hot water. With the collapse in house prices, particularly in rural areas, there are instances where the rebuilding cost is greater than the market value -- so don't be tempted to insure your home for less than the rebuilding cost.

Apply the square footage of your home to the Society of Chartered Surveyors Ireland's house rebuilding guide to calculate the correct rebuilding cost.

2 When insuring contents, people often pick a low number out of the air, but it could leave you exposed.

Take the time to look around your home to see how much it would cost to replace the contents in it --and insure your contents based on that value.

3 Don't be tempted to leave a "gap" in cover. If you are planning to switch to a cheaper provider, you may think that letting the cover lapse for just a few months could save you money.

But if the recent weather has shown us anything, it is that life is unpredictable. You never know when you might need to make a claim so make sure you're covered all the time.

4 If you are worried about flood damage, act immediately in assessing gas leaks or burst pipes. Get the experts in to do this.

You should also contact your insurer -- every situation is different so your insurer will be able to advise you what steps to take. You should also take photographs of the damage as these may be needed in the event of a claim.

5 Installing a monitored alarm could reduce your premium by up to 25 per cent. Alarms have come down significantly in cost in recent years.

6 Check if your policy has "add-ons" such as accidental damage. These extras are often costly and not always necessary.

7 There's little point in specifying valuable items such as iPads and bicycles if you opted for a higher excess -- say €500. It's the first part of a claim which you must pay yourself so it will not be worth your while claiming for an iPad or bicycle if the excess itself is more than the claim.

8 If you recently insulated your home or have an energy-efficient property, see if your insurer offers a discount for such additions. Some insurers offer discounts based on BER certs (which measure the energy efficiency of a property) and insulation -- a well-insulated property will usually have a lower incidence of burst pipes. This is a relatively new phenomenon and not yet widespread in the industry.

Philip Doyle is manager of

Irish Independent

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