A common mistake when insuring your home, is to insure for the market value. The correct sum insured is of course, the rebuild value.
Example: You purchase a site for €150,000. You then build a house for €200,000. The market value of this property is in excess of €350,000 but the value for insurance purposes is €200,000. You should also allow an additional amount for removal of debris.
My house will never be totally destroyed, so why should I insure it for the full amount?
THE AVERAGE CLAUSE. When it comes to calculating a claim for even a small amount of €1000, insurers will apply the average clause.
What does this mean?
The claim surveyor calculates that you should have insured your house for €100,000 rebuild cost. You only insured it for €75,000.
As a result, the insurer will only pay €75,000/€100,000 or 3/4 of any claim against the property.
So if your claim is for €1000, you will only get €750 less the policy excess.
How do I calculate the correct rebuilding cost for insurance purposes?
The Society of Chartered Surveyors produce a House Rebuilding Calculator and a Guide to House Rebuilding Costs for insurance purposes.
What value should I insure my contents for?
When it comes to contents, every home is different. One person may have a plasma TV in every room and another person may not have any TVs at all.
It is a good idea to walk through your house and calculate the value of your contents in that way. This should include all contents including clothes.
If you would like a quotation, please call us on 049-4332944, e-mail info@martininsurance.ie or complete our online enquiry form.
Disclaimer: The material contained is this article is for general information purposes only and does not constitute professional advice.
