Cost comparison shows value of shopping around for insurance

HOUSEHOLDERS looking to insure their homes could cut their costs in half if they avoid giving their custom to the big insurance companies, according to a new cost comparison.

The Financial Regulator got quotes from six different insurers for half a dozen different types of homes with costs ranging from €182 to €838 a year.

But an analysis of the results shows that in two-thirds of cases the highest premiums were charged by Ireland’s biggest insurance houses.

For example, a three-bed 19th century terrace home in Dublin 8 would cost €549 to insure fully with Royal Sun Alliance, the country’s number one property insurer.

Allianz, the country’s third biggest, quoted €612 while Eagle Star, the fourth ranked, would insure the house for a whopping €838.

The cheapest was €520 from Irish-based Quinn Direct, which offered a saving of €318 or 38% on the most expensive quote.

FBD, which weighs in at number five, quoted €607 while Hibernian, the number two, gave no quote.

The latest industry figures show that in 2005 Quinn sold property insurance policies worth €15.9million compared to €237m of custom that went to Royal Sun Alliance.

The difference in policy prices between competing insurers means a landlord wishing to insure a rented three-bed semi-detached home in Dublin 7 can save €281 or 53% by shopping around.

Quinn quotes €252 for the policy while Hibernian’s offer is €533. None of the other insurers quoted lower than €375 for the policy.

Premiums for household insurance are falling as Ireland’s insurance market is becoming increasingly competitive on the back of a booming economy.

Insurers are flocking to Ireland with latest Irish Insurance Federation figures showing the industry made almost €100m in profit in 2005 on home insurance alone after selling €572.5m of policies.

Yesterday the Financial Regulator urged consumers to make the most of the competition by doing their homework before taking out home insurance or renewing their existing policy.

“Our cost survey shows householders can make savings of €318 on the annual cost of home insurance,” said the regulator’s consumer director Mary O’Dea.

“Details of this cover vary from one insurer another so it is important to make sure you have the most suitable cover for your needs,” Ms O’Dea said.

Consumers need to get buildings insurance, to cover the cost of re-building the house should disaster strike, as well as contents cover.

They need to estimate the re-building cost as accurately as possible and work out the replacement value of the contents in event of theft, fire or accident.

“If your home is insured for too little and is damaged or destroyed, your insurance policy may not pay out enough to cover the cost of repairing or rebuilding it,” said Ms O’Dea.

“But if your home is insured for too much, you are paying a higher premium than you need to, and you will not get any extra if you make a claim.”

*The survey is available by ringing 1890-777777 or from the www.itsyourmoney.ie website