Understanding Home Insurance

Be all there – this is home

Where to buy home insurance cover

  • Contact a regulated insurer directly, either online or over the phone.

  • Seek professional advice through your financial adviser/broker.

  • As part of another package i.e., a bank or building society account.

Insuring your home

Building & Contents

This is the most comprehensive type of cover for your home and your belongings in it. Buildings can extend to outbuildings, patios, boundary walls etc. with standard risks all covered.

It’s important to insure for the building cover you need and no more. The cover you need is the costs for rebuilding your home if it needs to be rebuilt. Use a calculator such as www.scsi.ie which is independently produced by the Society of Chartered Surveyors in Ireland.

Building only

This cover is for buildings only, and excludes the contents of those buildings. It’s important to insure for the building cover you need and no more. Buildings can extend to outbuildings, sheds, patios, boundary walls etc. with standard risks all covered. The cover you need is the cost of rebuilding in the event that your home or other buildings need to be rebuilt. The Society of Chartered Surveyors has a useful calculator on their website, www.scsi.ie which can help you to calculate this figure.

Contents only

Insurance for contents protects against loss of or damage to home and personal contents. Policies can be extended to include cover for named and personal items that are lost or damaged inside and outside the home, These items include jewellery, computers, laptops, iPads, bicycles, cameras, and phones but bear in mind that these extras can increase the cost of your cover, so check with your insurance provider.

Be careful not to under-insure your contents. Insurers apply an “average clause” which limits what you can claim if you are under-insured. Discuss this with your insurer or broker who will help you to choose the most appropriate cover for your needs, at the best price.

What risks will my home be covered against?

The buildings and contents will be covered for loss or damage as a result of number of “perils”. These perils or risks normally include the following: fire, smoke, lightning, explosion, theft, storm, flood, burst water pipes, earthquake, impact, riot and malicious damage.

The Buildings Section will provide cover against subsidence (with most companies), loss of rent, accidental damage to service pipes, cables, glass in doors, windows and skylights, and to wash hand basins and toilet fittings. It also provides cover for your legal liability as owner.

In addition to covering lost or damaged items, contents cover covers your legal liability as a home occupier and the cost of temporary accommodation while your home is uninhabitable following an insured incident. Most contents policies also cover the personal legal liability of the policyholder and members of his/her family for accidents they may cause.

What to consider when choosing a home policy

Have the correct information to hand before you start the process

The more information you have about your house and contents to hand, the easier it will be to obtain a quote. You will need to know things like:

  • the rebuilding cost of your property

  • the types of locks on your doors

  • whether or not there is a monitored alarm on the property

  • details of any renovations

  • the types of windows on the property

Having a previous application or policy to hand will help with this.

Identify what is important to you

Ask yourself:

  • Do I need this cover, and why? Only buy the insurance you need. Understand what makes something worth insuring as a specific item, how to calculate a figure for contents insurance, what extras are worth paying for and what the rebuild cost of your home is.

  • Equally you should ensure your house is not under-insured. This takes place where you insure your property for less than it would cost to rebuild it or replace the contents. It can be very costly if you have to make a claim.

  • What do I want to include in my cover – do I need both Building and Contents insurance?

  • Is this policy required by my lender as part of my mortgage.

What you want to insure

Building & Contents · Building Only · Contents Only

Think about your policy excess

Increasing or reducing your excess has a direct impact on the price you will be quoted. Before you buy your insurance, work out the maths and see what best suits you if you have to make a claim.

How to calculate the value of your contents

The contents section of a home insurance policy relates to household goods, personal belongings, and valuables (including personal money up to an insurers’ stated limits in the policy schedule) within the household that the policyholder or any member household own.

The general basis for setting the sum insured for contents should be the full cost of replacing the contents, as new, after allowing for deterioration on items not covered on a ‘new for old’ basis, usually clothing, household linen etc. There are variations in the method of arriving at a sum insured for contents. Insurers tend to offer two different approaches:

  • The sum insured is selected by the consumer based on their assessment of what contents they own.

  • The insurer offers a choice of content sums insured that represent a percentage of the buildings sum insured i.e., 20/30% of the building sum insured.

Insuring a specified item is also worthwhile for items of sentimental value to the policyholder. Specified all risks cover will generally provide piece of mind for loss or damaged outside your home, typically items worth more than €1,000 or €2,000 such as an engagement rings, hearing aids or other jewellery. Where the insured wishes to insure high-value specified items, the insurer may seek additional information regarding security and storage precautions.

Understanding optional extras

Accidental Damage is an optional cover which provides protection for events not covered by the normal perils such as fire, flood, storm theft, etc. for example if a child accidently knocked over a T.V. (contents), or if you accidently put your foot through the attic floor/ceiling (buildings).

You can have both accidental damage insurance for buildings and accidental damage cover for contents cover. Some insurers automatically provide accidental damage cover in the buildings section of a policy. However, most give the policyholder the option of choosing standard perils or accidental damage cover for both buildings and contents.

‘All Risks’ is an optional extension of cover under your Home Insurance policy which protects you against loss or theft of, or accidental damage to, personal valuables outside the home. These could include jewellery, clothing, photographic or sports equipment. ‘All-risks’ is a general term used to describe the widest form of insurance cover, but is subject to a number of exclusions.

Common and unexpected mistakes policy holders make when choosing a policy

Remember that the insurance is designed to cover the cost of rebuilding your house, not the market value. You should make sure that the amount of the insurance covers enough to completely rebuild your home and replace your belongings, and also ensure that the property is not under-insured.

Be careful not to focus on price alone. This can mean that when you need to make a claim, important aspects you need in your policy will not be included. The lower level of cover can mean a reduction in premium, but if this was something you needed included in your policy and then cannot claim for it, it reduces the value of having insurance.

Similarly, it is important to understand any exclusions or limitations in your policy – what is excluded from cover, and the excess on any claims.

PLEASE NOTE

Insurance is a very detailed subject and the outlines above are not intended to be exhaustive. Instead we recommend that you ask your insurer or broker to explain each one in detail.

Want to know more?

Our FAQ section on Home Insurance answers some of the more common questions you may have.