With the frequency and intensity of climate events increasing, such as flooding from storms and wildfires, it’s essential to carefully review your home insurance policy. Knowing exactly what your coverage includes can make a significant difference during a crisis, as seen in the experiences of many homeowners.
Mary Feely’s ordeal serves as a stark reminder of the importance of comprehensive home insurance. When her Co Louth home faced extensive fire damage two years ago, Feely’s meticulous preparation ensured she had full coverage for rebuilding costs. This allowed her family to remain financially stable even as they endured 18 months of displacement, a critical period as one of her daughters prepared for Leaving Cert exams.
Living in a traditional-style cottage in Dunany, near Clogherhead, Feely’s property faced catastrophic damage. Not only was she compensated for the physical reconstruction of her home, but the loss assessor also made provisions for essential needs like winter clothing and new schoolbooks. “The assessor handled all the negotiations with the insurer, which made the process much easier,” Feely emphasizes.
After the fire, the Feely family temporarily resided with neighbors, through Airbnbs, and finally settled in a second-hand mobile home in their garden. The damages were extensive, with the back of the house—two bedrooms, a bathroom, a hot press, and a hall—being written off entirely. The kitchen suffered heavy smoke and water damage, necessitating a complete renovation, including a new roof, attic, ceilings, internal walls, floors, rewiring, and internal doors.
Feely’s advice is clear: always ensure your home is insured for its full value. “You can’t replace a person, even if you can rebuild a house,” she underscores. The financial strain of underinsurance could be devastating, especially considering the short and volatile weather predictions.
Is Your Home Adequately Insured?
Many homeowners face the issue of underinsurance, particularly after the Central Bank mandated index-linking for construction rebuild costs at the end of 2022. This policy adjustment led to increased rates, reflecting higher inflation of materials. For example, a home valued at €300,000 in 2020 could now require a rebuild costing €400,000, plus additional expenses for recent modifications like attic extensions or solar panels.
John Ryan from Allianz Ireland advises factoring in all subsequent improvements to your home’s value, such as those funded by SEAI grants or the installation of renewable energy systems. Ignoring these changes can leave you critically underinsured in the event of damage.
Types of Home Insurance in Ireland
Ireland has a total of 1.85 million occupied dwellings, of which about 30% are rented. Understanding the distinction between standard and non-standard home insurance is vital. Standard policies, offered by major insurers, cover homes under 100 years of age against fire, storm damage, and theft. Non-standard or specialist policies cater to older homes, often described as heritage buildings, and those in high-risk areas.
Paul Walsh from Peopl Insurance explains that insurers have detailed flood maps for every Eircode using data from floodinfo.ie. This comprehensive mapping helps determine risks associated with proximity to water sources, soil composition, and drainage capabilities. Homeowners considering properties in flood-prone areas should ring different insurers to see what rates they can offer based on their home’s specifics.
For homes older than 100 years or within architectural conservation areas, heritage insurance may be necessary. Mark Hewlett from Castleacre Insurance Ireland, endorsed by the Georgian Society and Historic Houses of Ireland, suggests consulting multiple insurers to understand the specifics and costs involved in insuring such properties.
Flood Risk: A Growing Concern
Flood risk has become a major issue in Ireland, affecting residential areas such as Galway, Dublin, Sligo, Dundalk, Waterford, Cork, and Limerick. Rising water tables and increasingly frequent heavy rain events mean that areas previously considered at low risk are now deemed more vulnerable. Homeowners in these regions can alleviate some risk by installing drainage flap valves, which prevent backflow of storm water and sewage into the home.
Walsh advocates for reinsurance programs similar to those available in the UK, where the government has established Flood Re to subsidize flood insurance for affected households. He suggests that Ireland should explore a similar system, given the growing threat of flooding and the high costs of rebuilding.
Allianz Ireland has proposed a different approach to addressing flood risks. The insurer suggested a state-run grant system for flood protection measures, allowing homeowners to invest in preventive solutions like dry-flood-proofing exterior walls and portable flood barriers.
Protection for Renters
Renters should not overlook the importance of their own insurance. Only about 10% of renters choose to get specific home insurance, leaving them vulnerable to theft, fire, and accidental damage. John Ryan points out that even in furnished properties, items like laptops, jewelry, TVs, and bikes should be insured. Additionally, renters are liable for any damage incurred during an emergency call, with costs potentially reaching up to €3,000.
Mick Comerford from Axa Retail warns that renters often mistakenly believe their valuables are covered under their landlord’s building insurance. “Your landlord’s insurance is for the building’s structure, not your personal contents,” he clarifies.
Expert Tips for Choosing Home Insurance
Full Annual Payment: Paying your home insurance premium in full and upfront annually can save you from additional surcharges associated with installment plans.
Seek Discounts: Several factors can qualify you for insurance discounts, such as monitored security systems, smoke, and carbon dioxide detectors, robust door locks, and higher excess amounts.
Research and Shop Around: Not all insurers offer the same rates, even for identical properties. Be sure to check various options to secure the best deal.
Contents Coverage: Basic all-risk policies typically cover items worth up to €3,000. For higher-value items, keep photographic evidence of purchases made within the past three years.
Emergency Protocol: Familiarize yourself with your insurance policy’s emergency clauses. Most specify the contact number to reach relevant emergency services.
Rebuild Costs: The Society of Chartered Surveyors in Ireland offers a rebuild calculator for speculatively built homes. For custom or historical properties, these rates may not apply; always consult with your insurer to get accurate estimates.
Navigating Flood Insurance: If your home is in a flood zone but has never experienced flooding, inform your insurer of any measures taken to improve its flood resistance. Not disclosing flood risks could lead to higher premiums or refusal of coverage.
Smoke Alarms: Properly functioning smoke alarms can save lives and reduce the extent of fire damage. Mary Feely’s experience highlighted the importance of reliable safety equipment; she now has wired-in smoke alarms in every room.
Loss Assessors: In the event of severe damage, hiring a loss assessor can ensure you receive fair compensation. These professionals represent your interests when dealing with the insurance company. You can find a registered assessor on the Central Bank website.
Reporting Upgrades: Inform your insurer immediately about any building work or renovations. Failure to notify could invalidate your coverage, especially if you are living elsewhere during the work.
Short-Term Rentals: If your home is listed for short-term Rental, ensure your policy is updated accordingly. Standard home insurance doesn’t cover properties used for vacation rentals.
Uninhabited Property: Inform your insurer if you will be away from your home for 60 days or more. Once the property is deemed uninhabited, your coverage terms may change.
House Swaps: During a house swap, switch your insurance to reflect your temporary occupancy. Many insurers adjust coverage when a property is no longer used as a primary residence.
Alternative Insurers: If you find it challenging to secure standard home insurance, contact specialist brokers or non-standard insurance providers. These companies focus on high-risk or unique properties.
Red Flags for Insurers
For Homeowners:
- Poor maintenance or visible structural damage.
- History of frequent or high-claim incidents.
- Location in high-risk zones like flood areas, subsidence-prone districts, or crime enclaves.
- Construction using non-standard materials.
- Home left vacant for extended periods.
- Unusual usage, such as conducting business activities or hosting frequent guests.
- Inaccuracies between property value and declared insurance coverage.
- Historical or listed status requiring higher restoration costs.
For Renters:
- Shared or sublet accommodations.
- Undisclosed or underinsured high-value belongings.
- Lack of basic security measures.
- Ambiguous or unauthorized lease agreements.
- Previous denial or non-renewal of renter’s insurance.
Ensuring your home insurance is up to date and comprehensive is a crucial step in safeguarding your financial well-being. Stay informed about the specifics of your policy and take proactive measures to maintain your home’s safety and value in light of climate risks.
Would you like to share your own home insurance experiences or ask questions to our experts? Leave a comment below and let’s discuss.
Ensure your home is insured for its full value. You cannot replace a person, even if you can rebuild a house.
Remember, the insurance industry is adept at assessing specific risks, so it’s in your best interest to be fully informed and prepared. Don’t hesitate to reach out to insurers to clarify any doubts about your coverage.
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