Insurance firms rip off home owners

SOME insurance companies are ripping off home owners, charging twice as much as rivals for insurance, a new survey reveals.

The Irish Financial Services Regulatory Authority (IFRSA) said its first-ever survey of home insurance shows customers could save 50% by shopping around.

Fine Gael enterprise, trade and employment spokesman Phil Hogan believes some companies are ripping off customers. He wants IFSRA to investigate the level of insurance premiums being charged to consumers in respect of household cover required in the context of a mortgage to financial institutions.

"It would appear that excessive rates are being charged because of a tied arrangement between the financial institutions and an insurance company. Consumers could save considerable monies if all tied insurance arrangements for mortgage holders were terminated by IFSRA," he said.

IFSRA consumer director Mary O'Dea said: "it is very important you do not automatically stay with your current insurer each time you receive your renewal notice.

"Shopping around can help you to find the right policy for your needs, ensuring that your home is not over or under-insured, which can lead to problems later," she added.

The survey selected six separate home owner profiles. It revealed that a Dublin 5, three-bed terraced home, costing €200,000 to rebuild, would cost as little as €295 to insure with Sun Alliance but €635, 115% more, with Ecclesiastical.

A four-bed detached Cork city home costing €180,000 to rebuild, would cost €319 to insure with Royal Sun Alliance but €577, 81% more, with the Ecclesiastical broker.

A three-bed semi-detached in Dublin, costing €230,000 to rebuild, would cost €550 to insure with Eagle Star and €454 with FBD.

The IFSRA survey found that while home insurance policy benefits can vary from one provider to another, they broadly give the same protection.

"Some of the featured insurers will not quote for homes at risk of flooding or subsidence, while others will provide cover, but not include flooding or subsidence risks in the policy. For consumers in this situation, it is even more important that they take the time to get the most suitable cover for their home," Ms O'Dea warned.

The IFSRA consumer director also found the excess clause - the amount which the customer must pay out of their own pocket for a claim - varied a lot.

Survey: www.ifsra.ie