SCSI help homeowners to insure homes correctly

Is your home insured? Or, perhaps more to the point, is your home adequately insured?

A recent report published by the Society of Chartered Surveyors Ireland (SCSI) revealed that the cost of rebuilding an Irish home has risen by a whopping 7.3% on average over the past 18 months. This, they say, shows how important it is to monitor and update your own home insurance on a yearly basis.

Unveiling the report, SCSI President Micheál Mahon explained the dangers of not doing so.

“The reality of the situation is that if the rebuild cost of your home is €280,000 and you only have it insured for €210,000, in the event of a catastrophic event such as a fire, you will be facing a shortfall of €70,000,” he said. “However, what a lot of homeowners don’t realise is that if in that situation there was a partial loss, which cost €80,000 to repair, the insured party would only receive €60,000 and face a shortfall of €20,000. 

“This is because the homeowner in question has only insured their property to three quarters of its rebuilding cost.”

Mr Mahon went on to advise homeowners to make use of the SCSI’s easy-to-use rebuild calculator “to ensure the reinstatement costs required on their home insurance premiums are adequate and fully in line with current figures with regard to house type and location.”

The free calculation tool can be found on the SCSI website.

“It’s also important that homeowners reassess their cover to take account of any changes such as home office extensions or garden offices,” Mr Mahon continued. “These have become increasingly popular with more people now working from home, but they need to be included in the house insurance. While premiums may rise as a result of these rebuilding cost increases, I would advise consumers to shop around to ensure they are getting the best value.”

It is very important that homeowners understand the difference between a valuation and rebuilding costs.

A market valuation is the expected amount another person would pay for your property if it was placed on the open market. The rebuilding costs are associated with the cost of building or replacing the dwelling.  The SCSI says these figures can be very different so it’s important that the SCSI calculator is not used for valuation purposes. 

Further information can be found in this informative SCSI booklet: SCSI House Rebuilding Guide 2021.

As always, if you have any queries please do not hesitate to give us a call on 064 66 34632. A member of the GMIB.ie team will be delighted to help.