If you underinsure your home, you may not receive the full amount necessary to rebuild, repair or replace it in the event of partial or complete damage.
Example A: Partial Damage
- Pat and Mary have their home insured for €180,000.
- The cost to fully rebuild is €300,000.
- This means it is underinsured by €120,000 (40%).
- Fire damage occurs to the kitchen
- It will cost €100,000 to repair.
- As the house has been underinsured by 40%, a deduction of 40% is made from the cost of the repair.
- Therefore, the most Pat and Mary will receive in a claim is €60,000**.
**Subject to terms, conditions and exceptions of the policy.
Example B: Complete/Total Loss
- Pat and Mary have their home insured for €180,000.
- The cost to fully rebuild is €300,000.
- This means it is underinsured by €120,000 (40%).
- Fire damage occurs to the house requiring a complete rebuild.
- The cost to fully rebuild is €300,000.
- As the house has been insured for €180,000, the most Pat and Mary will receive in a claim is €180,000**.
**Subject to terms, conditions and exceptions of the policy.
