Trending Insurance News

Home insurance costs rise as owners are urged to ensure properties are adequately covered – The Irish Times

Home insurance costs rise as owners are urged to ensure properties are adequately covered – The Irish Times


Insurance providers have begun notifying customers of a potential shortfall in home cover due to a rise in the price of building materials, a scenario that has sparked an expected hike in premium costs. The increase in potential repair or replacement costs means many homeowners could find themselves “underinsured”, meaning they would not be fully covered in the event of damage.

Five months after the risk was first flagged by the Central Bank of Ireland, providers have written to customers. In one instance insurer RSA flagged average materials price increases of as much as 40 per cent.

Policy holders are being asked to reassess their cover and, in an era of mounting cost-of-living pressures, upward re-evaluations mean higher premium charges.

“Risks of underinsurance on homes are typically being incurred where the insured value of the property is based on a developer’s cost and has not been updated or where costs for outbuildings, driveways, gates, fences, paving or lighting have not been included,” said a spokeswoman for Brokers Ireland, an umbrella body.

RSA, just one of numerous insurers in the market, has written to customers encouraging them to ensure they are adequately covered.

“The Society of Chartered Surveyors Ireland (SCSI) has recently updated their guide on the rebuilding cost of homes, which shows an increase of 28 per cent on average since their last published rebuilding guide,” it said. “For some regions/house types in Ireland the increases have been over 40 per cent.”

Will the protocol deal bring prosperity to Northern Ireland?

Such figures, it explained, are a reflection of increases in building and labour costs as well as those “associated with the latest building regulations and specifications required”.

In late September the Central Bank reported that underinsurance in the home insurance market had increased from 6.5 per cent in 2017 to 16.5 per cent last year.

A review it conducted also found “not all firms were sufficiently highlighting key risks” to consumers, and said this must be addressed.

“Firms must communicate with all home insurance customers setting out the consequences of being underinsured, the reasons why this is currently a heightened risk and how policyholders can better estimate an adequate ‘sum insured’ value,” it said.

The RSA letter included that criteria, pointing to one hypothetical example in which a house insured for a full rebuild cost of €400,000 was only covered for half of that sum. In such a case even a partial claim for €50,000 worth of repairs would only be covered to the value of €25,000. “Where your property is underinsured,” it said, “you will not be fully protected against loss or damage and the value of any claim is reduced by whatever proportion is represented by the level of underinsurance.”

Jonathan Hehir of Insuremyhouse.ie said premiums had been rising for customers who had reassessed their cover but stressed the importance of doing so to safeguard against being underinsured. However, he said, the majority could offset increases simply by shopping around.

“It’s not just in the last six months that people have been caught [out] by underinsurance, this has been going on for a year now,” he said, advising homeowners to consult estimated rebuilding costs calculated by the SCSI.



Source link

Exit mobile version