Covering all the bases
If you have a mortgage, you will have to purchase home insurance, but what product will suit you best?
If you’re tempted to shop online, look up every company on your short list, not just those that wave to you from the price comparison sites, as some firms remain resolutely independent. Once you’re attracted by a potential quote, pick up the phone and go over those essential details to flesh out a bespoke policy that makes sense for you and yours.
It might feel triumphant in the moment to shave something off the figure by guesstimating your coverage for contents downward. When it comes to a claim, this can prove a painfully cheap economy. The automatic cover given for possessions such as audio visual equipment may not reflect what you own in a standard policy, so expect to adjust this detailing to tailor what reflects your situation. The reinstatement value is the cost of re-building your house, its structure and permanent fixtures and fittings and is historically, under-estimated by many homeowners. If you are not sure what your rebuilding costs might be when asking for quotes (as opposed to the market value of the house), log onto the Society of Chartered Surveyors. www.scsi.ie.
Knowing what’s in a policy and what’s not offered as standard, is vital in weighing up the right product at the right price. If the specifics of a policy offers valuable extras such as All Risks cover for sports equipment and jewellery while travelling, it may be worth that bit more for total peace of mind. Go over the policy details and compare products, like with like, on their content and not just the end figure. For example, Alliance in their re-build cover will bring the house to a BER rating of A3. Exclusions and extras can vary wildly.
The relationship between you and your insurer is a two-way street based on professional responsibilities on their part, and open communication and accurate information on yours. Transferring the risk of something happening to your home and material possessions is a serious business and the insurer has to decide the risk to set the premium amount on your policy. All restrictions, inclusions and vital points of the policy should be explained to you by the representative of the insurance company. If you don’t understand something on a form or during a meeting or call, insist on clarification. If you don’t have security locks fitted on windows and doors, don’t declare in writing that you do as it may void your claim if the worst happens.
The insurance market is lucrative and therefore highly competitive. You don’t have to buy every aspect of your home insurance from one company. You can for example split the buildings and contents cover to suit yourself, although combining them may save money if the policy details suit you. It’s lazy to simply stay with the same company dropping your renewal in the post every year — question it for value and research; what else is out on the market? Know what you want. If you extend or improve your insurance, it should be altered to reflect these changes. Policies are index linked to keep up with rising rebuilding costs, so expect a standing policy to increase annually.
This is not the Lotto, and claiming will not redeem the figures on an over-inflated policy. You will only be reimbursed for the actual cost of rebuilding your home or replacing the contents. There is an excess on your policy for example in the case of contents damage (generally €200-€500), and you will be picking up the tab for figures under this excess number. Normal wear and tear is obviously not covered. Unspecified items cover is generally restricted to a figure per item, so if you have something especially valuable it should be listed and insured separately. You should always check that someone working on your home has their own public liability insurance. If they damage your home, it might not be covered by your own insurance.
For further detailed, independent information on choosing an insurer and securing the right policy, visit the home pages of the National Consumer Association of Ireland. www.nca.ie
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