Consumer Corner: Do I need insurance for my house or apartment?

The Central Bank found that thousands of home-insurance policy holders are paying 32% above average

Should an unforeseen event arise, home insurance offers you both peace of mind as well as potential financial reparations.

You might pay home insurance for all your life and never use it. However, it is essential if you own a home, and you may have to use it.

Make sure you are not overpaying, or indeed underpaying, for it. Premiums are increasing, but homeowners can cut their monthly bills. In Ireland, there are 1.3m home-insurance policy holders. However, thousands of people are paying too much, sometimes by hundreds of euro. The Central Bank of Ireland has calculated that people who have stayed with their home-insurance provider for nine years or more are overpaying by 32%.

If you have home insurance, shop around. Online home-insurance broker Insuremyhouse.ie said homeowners who renew their policies without shopping around could be paying double what they should be. The broker cited the example of the same policy for the same property ranging from €285.08 to €585. 

Jonathan Hehir, managing director of Insuremyhouse.ie, said: "When it comes to shopping around successfully, the key to the best value is making sure you get a wide number of quotes. Don't limit yourself to just one or two from the main providers." Also, check if your insurance company will offer a 'bundle' deal. That means that they will give a discounted price if you bundle together home, motor, and other insurance policies. They may give further discounts if you add a spouse to your insurance package.

Many insurers will offer discounts if there's an alarm on the house. Added extras to the house, like upgraded heating, plumbing and electrical systems that reduce the risk of fire and water damage, could also bring down your premium.

A part of your home-insurance premium will be the possessions in your home. It is worth reviewing these each year and making sure you aren't still paying for something you no longer have.

Mr Hehir said: "By shopping around and by being a little savvier about your policy details, there are plenty of ways to potentially curtail your costs. Surely, savings of this size are worth that little bit of extra effort." The premium is one element of your home insurance, but should the time come that you need to use your insurance, it is important that you do not leave yourself financially exposed.

Alliance Insurance said that 56% of Irish homeowners did not check the rebuild cost of their homes in the last year and that they could be under-insured. Building costs are rising, so now is a good time to check your policy. The Society of Chartered Surveyors Ireland is a good place to start and they have a  calculator on their site that can help.