Underinsurance means you are not fully protected in the event of loss or damage occurring to your home (buildings and/or contents including your personal possessions such as jewellery, sports equipment, pedal cycles).
Take time when first arranging your policy to check if the amounts you intend to insure your home for are adequate. Remember, failing to arrange adequate cover for your home may lower your chances of covering the cost of repairs or entirely replacing your home in the event of loss or damage (including its contents and personal possessions).
Watch our short explainer video to help you avoid being underinsured. Let us help you find the right cover to protect your world.
4 things to consider to avoid underinsurance
1. Work out how much home insurance cover you need
The amount you insure your home for must include the full cost of rebuilding the property, including the cost of site clearance and architects’ fees. This is not to be confused with the market value. The market value refers to the amount your home is likely to sell for which takes into account the land your home sits on.
The Society of Chartered Surveyors Ireland (SCSI) provides both a House Rebuild Guide and a House Rebuild Calculator to assist you in insuring the buildings of your home. They also provide a link to find an expert should you determine your home is best assessed by a local Chartered Quantity Surveyor.
2. Additions and upgrades may change your insurance need
Upgrades or additions to your home, including contents and personal possessions, may change the amount you need to insure your home for. Items such as a new sofa, laptop, television, or carpets may increase the cost to replace all contents as new. Installing a new kitchen, office, bathroom or fitted wardrobes may require a review of the cost to rebuild your home.
3. Review your policy cover regularly
Whilst underinsurance relates to the amounts you have insured your home for, it is still important to review your policy cover regularly to ensure it continues to meet your needs, especially if you have made any additions or upgrades. You can do so by reviewing your policy documentation (Policy Schedule and Statement of Fact) together with your policy booklet.
4. Keep us informed
Keeping us informed of changes to your home, such as those listed above, will mean you are best protected in the event of a loss or damage.
FAQs
The amount you insure your home for is referred to as the sum insured. If your home is underinsured, you may not receive the full amount necessary to rebuild, repair or replace it in the event of partial or complete damage. You are responsible for setting the sum insured.
1. Adequately setting your sums insured from the start of your policy/last renewal is key to preventing underinsurance.
2. Review your sums insured during the policy period if you have made changes, additions or upgrades to you home.
3. Check out our Tips to avoid underinsurance in order to best protect you and your home in the event of loss or damage.
4. Consider any wider economic factors that may need to be accounted for when setting/reviewing your sums insured. These can include inflation, the costs of materials or contents, or the availability and cost of labour. Your sums insured may need to be amended to reflect any changes as a result of these factors.
Your policy is index-linked which means in times of inflation and in line with your policy terms and conditions, we will adjust your buildings and contents sums insured at renewal to take account of inflation.
We also monitor inflation throughout the policy period and in line with your policy terms and conditions. When applicable, we will not adjust your buildings and contents sums insured but instead we will automatically make an allowance for the impact of inflation when assessing a claim under your policy. This allowance will be made at no extra cost to you.
It is important to note that index-linking is not specific to your property and relying on index-linking alone may not be sufficient to protect you from underinsurance, especially at renewal or during the policy period if you have made changes, additions or upgrades to your home. It is vital that you review your sum insured regularly to ensure you have adequate cover to meet your needs. For more information on index linking, please refer to your policy booklet.
The sum insured is outlined in your policy schedule.