Burglaries and storm damage peak in winter. That makes now a good time to check your house insurance. Too many of us blindly renew policies that cost too much, cover too little, or both. The only ones winning are insurance companies.
The Central Bank of Ireland has found dual pricing in the insurance market to be common. This is where customers with similar risk profiles are charged different premiums. The most common form is a new customer getting a better rate than those renewing. Shop around and switch or you'll pay a premium for your loyalty.
Get the basics right
Getting an insurance quote means answering a blizzard of questions. You’re so fried by the end, you’ll say anything to get off the phone. But what you say matters, the wrong answers can invalidate a claim.
If you’ve made a home insurance claim before, get the dates and value right.
"There is a lot of accidental non-disclosure in the home insurance area," says Jonathan Hehir of Insuremyhouse.ie.
“I’ve seen a claim turned down because someone thought their previous claim was €9,000 when it was €13,000. The insurance company had a threshold of €10,000. The customer didn’t get it wrong on purpose, they just didn’t know it made a difference.”
It’s important to check before you get a quote.
“Get the date and the amount paid out right. If you fail to declare even a small previous claim, you might not get a future large claim paid.”
Don’t rely on memory, if you’re not sure call your previous insurer.
“I’ve had to make representations on behalf of widows or widowers where they weren’t aware there was a previous claim. It causes a lot of stress.”
Insurance companies have a central database but they don’t check it when you buy the policy, only after you claim, at which point it’s too late for you.
For older houses, you’ll need to be fairly accurate about the build date. Being out by a few years is fine, 20 or 30 years, maybe not. Some insurers may not insure a 100 year-old house, so if yours is an 1890s build, and not 1920 like you thought, that’s a problem.
“They may say, this house is outside our criteria and we wouldn’t have insured it had we known.”
Some facts may swing you a discount, so don’t be shy about stating them. Having no previous claims, or for some insurers, having no claims in the past three years will count.
Garda figures show residential burglaries were down almost 60 per cent this April compared to the same month last year. It’s no wonder there are insurance discounts for homes occupied during the day. If you are among the many now working from home, this can bring premium savings. Security locks on the windows and doors will help your risk rating, too.
You can often get a discount on your premium if you agree to higher excess too – this is the amount you pay towards any claim before your insurer pays the balance
Having a working smoke alarm and a working house alarm that you actually switch on will help. Some insurance companies may still pay out if the alarm was off, but not if it’s on the blink.
“I’ve seen cases where people have been getting an alarm discount but their alarm hasn’t worked for years. If you have an alarm discount, ask them how much of a discount you are getting. If it’s €20 and you are not religious about setting it, say no to it,” says Hehir.
Those using an alarm may get extra points if it’s a monitored system, as will those living in a neighbourhood watch area.
Having a house that’s more than ten years old is worth mentioning. Non-smoking households are statistically safer too. And don’t be coy about your age either – if you or someone in the house is over 40, or in some cases over 50, you’ll be a safer bet too. If you have another insurance product with the company, it’s worth checking if they offer a discount for a home policy.
You can often get a discount on your premium if you agree to higher excess too – this is the amount you pay towards any claim before your insurer pays the balance. It’s normally between €100 and €500 for standard claims, so figure out what you are comfortable with. Remember, the policy with the lowest premium isn’t always the best, know what’s covered.
It can be quicker to put an estimated catch-all value on the contents of your home, but doing so may leave you under-insured. If the worst happens, curtains, bedside tables, lamps, clothes, kitchen gadgets and everything else will need replacing. It’s time-consuming, but going room-by-room will make sure the contents cover on your policy reflects their value.
High-value items are worth highlighting to your insurer. If your estimated contents are €50,000 for example, included in which is a €5,000 painting, be sure to note it as a high-value item. You won’t be charged more to insure it, but naming it records that it exists.
When getting rebuild cover, don't confuse the market value of your house with its rebuild cost
For high-value items that leave the house, like an engagement ring, it should be listed as a ‘specified item’ on your policy for which you may pay an additional premium. Such cover may require an up to date valuation. Take a photo of you wearing it too. If it’s an antique or inherited ring, you won’t have a receipt or proof of purchase.
“Having a picture of you wearing it puts you into a different league in terms of how quickly that claim will be settled. A photo can make all the difference,” says Hehir.
The Bike-to-Work scheme and then lockdown has brought an explosion in high-end bicycle sales, and high-end bicycle thefts too. Reported bike thefts in Dublin jumped by 46 per cent in June and 40 per cent nationally, as thieves profited from unprecedented demand as people struggled to buy from shops.
If you store your bike in your shed, it will be covered under your house insurance, though certain policies have a limit to what is covered in a shed or outbuilding. If your flash bike is your baby, you could list it as a specified item on the policy, insured outside your house. This could add €40 to €50 to your premium however, so do the sums.
Cost to rebuild
If you have a mortgage, your lender can insist that you have buildings insurance. This covers you for rebuild costs if your home is destroyed. But even if you’re mortgage-free, it’s still a good idea to insure your home. When getting rebuild cover, don’t confuse the market value of your house with its rebuild cost.
Home rebuild costs have been on the up in recent years. Underestimating their cost could mean your house is underinsured and you might not be able to afford to rebuild if the worst happens.
If you haven’t changed your building cover estimate for four years, you will be underinsured by around 20 per cent, the Society of Chartered Surveyors Ireland estimates. Being underinsured is bad news whether it’s your whole house that’s damaged or just a part of it.
When the main five or six insurers are not offering you a price for flood, you can pretty much guarantee you are in a flood area
If a property will cost €400,000 to rebuild and it is insured for only €300,000, you’ll need to find the missing €100,000. If you have to replace a kitchen only at a cost of €60,000, the insurer may be willing to pay only €45,000 of that, as claims are generally managed pro-rata. Getting it wrong could prove costly. If you extend or improve your home, you may need to increase the buildings cover on your policy.
Public liability insurance will cover you if someone is injured on your property. Many home policies include an element of public liability but it is worth checking. Otherwise you will need to ensure that someone working on your property like a cleaner, painter or tutor carries his or her own insurance.
We've already had our first autumn storm with Ellen wreaking havoc in low-lying areas of Cork city and the west Cork coast in particular. If you are in a known flood area, it will be hard to get home insurance.
If you are buying a house, phone around or seek out some online insurance quotes for your chosen house to test for red flags. Insurance companies have done extensive research and will know where has flooded or where is likely to.
“You will very quickly find out if you are in a flood area because when the main five or six insurers are not offering you a price for flood, you can pretty much guarantee you are in a flood area,” says Hehir. The same applies to subsidence.
If you have a straightforward, low value insurance claim, you can make it yourself. Check the excess you have to pay yourself first. You will not be able to claim for amounts less than the excess. If the amount of a claim is small, consider whether it is worth making it. If you make a claim, you may lose your no-claims discount and find it more difficult to get certain types of cover at renewal.
For larger claims, it can be worth involving an assessor to act for you for which you must pay a fee.
“For most people it will help them because they will get the true value of the claim processed by someone experienced in dealing with it,” says Hehir.
If part of your roof blows off, the householder’s untrained eye might underestimate the impact.
“A loss assessor will know that in six months the plasterboard will come down, the wooden floors will warp, the carpet will need replacing or you will need to get wiring done. You may not realise the extent of the damage done.”
If a claim is not settled in your favour, the insurer should explain the reasons why in writing, and provide you with details of how you can appeal. It is your choice to accept their settlement. Negotiate with your insurance company or broker if you are unhappy with their offer.