Home Insurance policies are taken out by 95% of homeowners in Ireland according to a recent survey done on behalf of KBC. The average annual home insurance premium (buildings and contents) in Ireland was €479 in 2011 (based 2011 figures from AA Ireland).
That figure is very high in comparison to the UK – where in 2011 the average premium was just £153 -(About €183) , according to MoneySuperMarket.com
There are just under 2 million homes in Ireland – so that’s a total spend on home insurance of about €950 Million a year – or just under 1 Billion . (Don’t forget 2% of that is going in a levy towards the Quinn Insurance bailout – that’s €20 Million a year !)
With that amount of revenue at stake it’s no wonder that home insurance is a very competitive market . Some insurance companies will offer special deals . discounts and free gifts to try to attract new customers and get them to switch insurers.
The insurance companies then hope that homeowners will just renew their policy automatically every year – but as always the advice from us is to shop around .
People who become complacent by sticking with existing policies will end up paying too much if they don’t take advantage of shopping around.
Another area to look out for is the sum insured or the insurance value of the house. This is the cost of rebuilding the house (not the market value). At renewal – the home insurance companies will usually automatically increase the “sum insured” on the policy by the level of inflation . The insurance premium then rises as the sum insured rises. But rebuilding costs have fallen 24% since 2008 – according to the figures from the Society of Chartered Surveyors (SCS) .
On a house insured for €250k with contents at 20% of that (€50k) – we got an online quote for home insurance of €425 . A second quote for insurance on a sum insured of 25% less (€200k buildings and €40k contents) came out at €365 . Thats a difference of €60 a year (14% decrease)
So – many homeowners could be overpaying their insurance companies by as much as 14% a year – or maybe more.
You should check your home insurance policy – especially at renewal – and compare the sum insured with the rebuilding cost . You can check approximate rebuilding costs here at the SCS website