The Money Doctor: Home Insurance
Q We bought our home five years ago and we have never reviewed our home insurance since. Are there savings to be made from shoppingaround or are all policies the same? JENNY, CLONTARF
A Shopping around is never a waste of time. Securing quotes from all of the home insurance providers on the market may sound like hard work, but there are ways of easing the task.
You can buy directly from an insurance company via the internet, or through a broker. Brokers can save time and may have special deals, or be able to provide a quotation from a specialist insurer.
Don't forget to bargain. If you get a good quote from one company, it is worthwhile seeing if your existing insurer can match or better it.
The cost of your monthly premium depends on three factors. Firstly, the amount for which you insure your home and whether it also includes the contents. The greater the value of your buildings and contents, the higher your premium will be.
Secondly, the location of your home -- insurers charge more for homes in areas where there is a high rate of burglary or flooding.
Finally, the type of cover and discounts you receive will affect your premium -- if you have an alarm approved by the National Standards Authority of Ireland you may get up to 25pc off.
A home insurance policy covers two areas, building and contents insurance. Buildings insurance covers the structure of the house and certain internal fixtures such as wash basins, toilets, garage, outbuildings, walls and fences. You need to insure your home for the amount it would cost to re-build rather than market value. If mortgaged, usually your lender will require a minimum amount.
A contents policy covers the amount it would cost to replace personal items, furniture, electrical appliances and clothing. You need to insure for the amount it would cost to replace goods. Most insurers will insist on a minimum sum (€25,000-€50,000).
Consider what is included. If you over-insure you will be paying more but you will not get any extra benefit if you have to claim. If you under-insure, you run the risk of not being able to sufficiently repair your home or replace your goods and valuables.
The average clause can catch people out: under insure your property by 50pc and in the event of a fire wiping it out, you will only receive 50pc of the sum insured.
You should review your insurance EVERY year.