Recruitment HomepageLibraryHome Insurance – The Adequacy of Insured Values

Failing to have your property adequately valued will cause a reduction in the amount you can claim in the unfortunate event of loss or damage to your home.

With building costs doubling over the past number of years many homeowners are underestimating the level of cover required to meet the cost of rebuilding or repairing their homes. Don’t forget that your buildings amount should also include bathroom suites, fitted kitchens, wardrobes, and fireplaces; basically anything that is fixed to the house. You should also remember to include outbuildings, walls, patios, fences, conservatories, attic conversions and any other improvements or extensions you have made to your home.

Underinsuring can lead to a shortfall between what your insurance company is willing to pay out in the event of a claim and what the actual cost of repairing or replacing your property amounts to.

The Society of Chartered Surveyors publish a valuable Guide to House Rebuilding on an annual basis. These figures should give you a good indication as to how much you should insure your buildings for. However, if you live in a “one-off” house with special features, a period house or a house with more than two storeys it is a good idea to have your property professionally valued. Please remember that the market value of your home bears little or no relation to the rebuilding cost.

Under-insurance can also occur where contents are inadequately valued. Most home insurance policies are on a “new for old” replacement basis so that suite of furniture that cost you €1000 in 1995 could well cost €2000 to replace today. Needless to say, it would come as a nasty shock, in the unfortunate event of your suite being destroyed, to be offered a settlement of only half the replacement cost. If you apply this to every item of furniture in your home it could leave you grossly under-insured, not to mention the cost of replacing curtains, carpets, electrical appliances, etc.

Whilst insurers will increase your buildings sums insured in line with various indeces, this may still not be enough to keep your head above water, especially if you are under-insured in the first place.

Annette Foley is a Business Development Executive with Coyle Hamilton

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