I often get asked the question “how much should I insure my home or business for?” In the current economic climate it’s tempting to reduce the sum insured as, quite rightly so, the cost of re-build is considerably less than what it was a few years ago.

Furthermore, there is the perception that savings in premiums are to be made by reducing the reinstatement value of your property.

However it could cost you THOUSANDS of euros if you incorrectly estimate the reinstatement value just to save €50 or €100 in premium.

Below are some key points to remember and guidance to consider when renewing your Home Insurance:-

It represents the reinstatement value and is calculated by working out the total cost of rebuilding your property including construction costs, architects fees, surveyors fees, site clearance fees and any other associated building costs.

Insurance companies use a rate per square foot for estimating what your property should be insured for. This rate varies depending on which area you live, the type of property, and the standard of finish. The rate can be anything between €100 per square foot for a detached dwelling in the North West to €170 per square foot for a similar property in the Dublin area.

I always recommend to clients to be cautious in the calculation. If you are unsure about calculating the rebuilding cost, give me a call on 074 912 9243.

You should insure your contents for the cost to replace them with new items. Contents include all items belonging to you or any other member of the household, including personal items and items of specific value which can be physically “removed” from the building.

To estimate the value of the contents in your house, go from room to room (including all sheds, garages and out-houses) and work out the cost of replacing the items in each room. This should include carpets and curtains. Add the totals to get your Contents Sum Insured.

High risk items are specifically jewellery, items of precious metal, pictures, watches, furs, works of art, television, video and audio equipment, home computer, photographic equipment, stamps or coins.

Individual high risk items will be covered in your home for up to 5% of the contents sum insured. The total value of these high risk items cannot be more than 50% of the contents sum insured.  If this is not the case you will need to make arrangements for insurance of these items.

If at the time of the loss or damage, your sums insured are less than the full reinstatement or replacement cost, then you will be your own insurer for the difference.

Your insurer will only pay their share of the loss or damage which your sum insured bears to such cost.

For example:

Your home is insured at 50% of its actual replacement value.

You experience a loss to the value of €50,000 in relation to damage caused to your home.

In this case your insurer will only pay 50% of the cost of the loss – €25,000. You will have to use your own finance to complete the remedial work.

All Risks Cover is an optional cover available on a household policy to cover valuable items lost or damaged while inside or outside your home.

Specified All Risks allows you to note specific items of value that you want insured on an All Risks basis.

Please note, a purchase receipt and/or valuation will be required in the event of a claim.

All Risks Cover is an optional cover available on a household policy to cover valuable items lost or damaged while inside or outside your home.

Unspecified All Risks allows you to choose cover for up to €3,000 or €5,000 with single article limits of €1,000 or €2,000 respectively. This gives you the benefit of All Risks cover without the need for identifying each individual item you want covered on the policy.

This cover excludes bicycles, camcorders, mobile phones or hearing aids which must be included as specified all risks items irrespective of value.

Please note, a purchase receipt and/or valuation will be required in the event of a claim.

Damien McKay

HD McKay Consulting Engineers

T: +353 (0)74 912 9243

M: +353 (0)87 283 2666

E: damien@consultingengineers.ie

W: www.consultingengineers.ie