Home insurance shortfall leaves Irish homes short by €83,153

Homeowners warned to check cover before winter

The research by OUTsurance, reported by RTÉ, found that many properties are insured for just 50% of the amount required to rebuild the house and replace its contents. 

The company is now calling on homeowners to review their policies before winter weather puts their cover to the test.

The warning comes as families face the prospect of higher winter bills. 

Insurance is another expense that can easily go unchecked until a claim needs to be made.

Underinsured homeowners could face thousands in unexpected costs

A major issue is the rising cost of rebuilding properties. If a home’s insured value has not been updated to reflect those increases, its owner could discover they are not covered for the full cost of repairs.

OUTsurance highlighted a property that would cost €300,000 to rebuild but has insurance cover of only €225,000. 

Because the policy covers 25% less than the rebuild value, a claim could also be reduced by that proportion under a rule known as the average clause.

For example, a homeowner facing €40,000 in storm damage could receive just €30,000 from their insurer, leaving them to pay the outstanding €10,000 themselves.

The hidden risk lurking in Irish home insurance policies

Donal O’Sullivan, OUTsurance’s head of claims, said people often fall short on cover because they have not realised how much rebuilding prices have changed.

"One of the main reasons homeowners are underinsured is simply because they are unaware of the extent to which house rebuilding costs have risen in recent years and the direct knock-on effect this has on how much they should insure their property for," he said.

"As a result, the level of cover selected for homes a few years ago may no longer reflect today’s rebuilding costs or the current value at risk."

The insurer also warned that contents cover can be inadequate, meaning homeowners risk facing additional expenses to replace their belongings after a serious loss.

Recent home improvements may create a further gap. O’Sullivan noted that many people have renovated their properties, but may not have informed their insurer or adjusted their policy.

An extension or attic conversion can increase the amount needed to rebuild a home, leaving owners with less protection than they realise if their cover has not been updated.