Some tips and advice from the experts.
Mortgage lenders insist that borrowers take out home insurance but the Irish Financial Services Regulatory Authority (IFSRA) recommends that all homeowners insure their homes, even if they don't have a mortgage.
It is not compulsory to buy home insurance from the lender. Homeowners can shop around for the lowest quote or the cover that they feel best suits their needs.
Home insurance should be based on the cost of completely rebuilding the house - not the market value of the house. A guide to rebuilding costs for estate-type houses in the Dublin, Cork, Galway, Limerick and Waterford areas is available from the Society of Chartered Surveyors at www.scs.ie, but owners of properties with unusual design features may need to get a survey.
Contents are often insured for a value equivalent to a percentage of the building's insurance, e.g. 20 per cent, 30 per cent, etc. If you have particularly valuable items in the home, these should be named on the policy and the contents cover bumped up accordingly.
A typical three-bedroom semi-detached house in Dublin with a rebuilding cost of €230,000 and contents insured for €50,000 will cost around €400-€640 a year to insure, so it is worth shopping around.
IFSRA advises homeowners to avoid underinsuring their buildings and contents, warning that underinsuring means any claim for compensation will usually be reduced by the percentage that you are underinsured.
There is no advantage to overinsuring either. "You should be aware that, if you overinsure, you will only receive the actual cost of rebuild, repair or replacement - no more," according to IFSRA.
Remember that home insurance covers damage caused by fire, explosion and extreme weather, but it won't usually cover damage caused by normal wear and tear. Damage caused by floods or subsidence may not be covered if you live in an area prone to flooding or subsidence.
An independent guide and a survey of the typical premiums available from eight insurers is available from IFSRA at www.itsyourmoney.ie, by calling its consumer helpline on 1890 777 777 or from its information centre at College Green in Dublin.
