13.04.2017 Home Insurance
Home insurance is hugely important. It acts as a safe guard protecting your house and possessions and will save you money in the event of an incident. Taking out a home insurance policy can be daunting. There’s a lot of technical terms used that can be difficult to understand and you could easily end up over or underinsuring your home and contents.
We’re de-bunking 5 home insurance myths to avoid this:
Home insurance is not a legal requirement in Ireland, however when applying for a mortgage, most companies will insist that you have home insurance in the form of buildings insurance so you can afford the rebuilding of your home if it’s destroyed.
What does buildings insurance cover?
A buildings insurance policy covers the actual structure of your home along with any permeant fixtures. These include:
What will buildings insurance protect me against?
Buildings insurance usually covers the cost of rebuilding or repairing your home in the event of the following:
No – buildings insurance will more than likely be a condition of your mortgage but you are free to shop around and choose a competitive insurance company. Your mortgage provider can reject your choice of insurance company but they cannot force you to take out insurance with them.
Some mortgage packages include home insurance. In this case you will have to go with the advised insurance company as part of the deal.
You do not need to insure your home for its market value. This would result in a huge over-payment on your home insurance policy. In the unfortunate event of losing your home to a fire or flood you would only need to pay for the rebuilding of the house.
The cost of rebuilding your home is significantly lower than its market value as location and housing prices do not influence the cost of its reconstruction.
If you were to over-insure your buildings to the market value of your house you will still only receive the rebuilding costs of the property in the event of a claim resulting in a waste of your hard-earned money.
Home insurance is a combination of two types of cover: buildings insurance and contents insurance. Buildings insurance covers the outer building and other fixtures in the home such as the kitchen and bathroom. Contents insurance covers:
Your contents cover should protect the above items from loss or damage due to:
Like buildings cover, contents insurance is based on a monetary amount but the value is to be decided by you. Items over a certain value such as jewellery, fur and expensive bicycles will need to be specified and added as an extra on your home insurance policy. In some cases, your insurance company will require a valuation of the items if they are worth more than €5,000.
How do I calculate the level of contents insurance needed?
Depending on your level of contents insurance, your items might be under insured. Talk to your insurer and create an inventory of your contents to gage how much they should be insured for. Also specify any valuables with your insurance provider to ensure their protection.
Most home insurance policies will protect your home while its unoccupied for up to 35 days. As long as your holidays are shorter than 35 days your home will be covered.
Due to the increased risk of theft, damage and burst pipes etc in an unoccupied home you might need an unoccupied home insurance policy if the house is going to be vacant for more than 35 days. Check your policy terms with your provider for more clarity on this.