Need some assistance in insuring your most valuable asset? Then look no further at some of our invaluable tips below!
Putting a value on your home.
A very common error many people make is insuring their homes for the market value…rather than the rebuilding cost. If your home is worth €350,000 on the open market but only costs €275,000 to rebuild, then you should only insure your home for €275,000. If you insure your home for €350,000 and it becomes damaged beyond repair, the most you will receive from your claim is the rebuilding costs…in this case €275,000, so you are wasting your mosey by paying for a more expensive premium that will never pay out on the amount insured!
The easiest way of estimating the true rebuilding cost is by finding the average building cost for identical homes in the same location as your own…typically the average meter squared rebuilding cost multiplied by the size of your home. If you happen to add additional elements to the home during the year, like an attic conversion or the addition of a sun lounge, you will need to increase your original rebuilding cost insurance figure.
Insuring your property within your home!
The insurance company will only pay out on the full rebuilding costs of your home if it becomes damaged beyond repair…but you will not even have a chair to sit on to admire your new home unless you also take out contents insurance. You need to put a replacement estimate on every item in the home…which could be difficult to do after these items are destroyed, unless your memory is perfect!
Get a journal and itimise EVERY object in each room…from stand-alone items like your suite, tables and chairs, to the less obvious but typically more expensive items like built-in wardrobes and fitted kitchens and alarm systems.
The crown jewels!
Never overlook those smaller yet expensive personal belongings, typically hiding away in drawers such as jewelry and cash, or on the walls in the form valuable art, or those items plugged into electric sockets like laptops, smart phones and tablets. Many expensive items need to be covered in addition a typical contents policy by listing each item individually. Even larger objects like your €7,000 home cinema system may not be covered under the normal contents policy.
Unfortunately, even by including all your valuable items in an ‘all risk’ cover policy, some items may still be too expensive to fully cover. For example, an insurance company may limit the payout on items such as wedding rings and other diamond and gold items…so it is imperative that you compare and contrast how the multitude of insurance companies deal with these types of valuables.
Again, just as with the accurate valuation of your rebuilding costs, never overestimate the value of your household contents or valuables, as you will only get back what they are worth…not what they are worth to you!
Can I get 100% coverage?
Typically, the answer is no! Most insurance policies have what is called an excess clause, which, in the case of you making a claim, means that you will need to pay out a certain amount yourself before the insurers will start paying out the rest of the claim. So if your €2,000 TV is stolen and there is an excess figure of €1,000 on your policy, the insurance company will only pay you €1,000. The lower the excess you want on your policy the more expensive the policy becomes.
Should I be alarmed?
Yes! But only in the sense of ensuring that your home is protected by an alarm. Obviously the more extensive the alarm the better, particularly when it comes to those that are monitored. Houses with alarms installed will always get a reduction in their insurance policy. Even the addition of quality locks on your doors could bring the cost down. Also mention that your estate/area is protected by an active neighborhood watch scheme, if such a scheme is up and running.
By installing/fitting smoke/carbon monoxide alarms, the chances of a fire causing extensive damage to your property or you and your family’s physical wellbeing is dramatically reduced…the result of which is that your insurance company will offer you another reduction in your insurance policy. The more smoke alarms the better due to the proliferation of electrical devises like game consuls, smart phones and pads, PCs and laptops etc…all of which could overheat if not monitored/charged correctly..
Always read the fine print!
It is extremely important that you go over the fine print in your policy before opting to choose if as the right one for you. Take out a magnifying glass if you need to! Not only should you check out the fine print before purchasing the policy, you should also check the renewed policy every year for subtle changes the insurance company may have made, without making it crystal clear to you what the consequences of these changes may mean if you need to make a claim. Another thing to check is the accuracy of the details you supplied to the insurance company when applying for a policy. If you have exaggerated or lied about something, e.g. the existence of smoke alarms when in fact you have none installed, your policy may become null and void!
Public liability insurance.
Nobody wants a tiler (or indeed Santa!) to fall off your roof and put in a big claim against you…or one of your child’s friends to fall off a bouncy castle in your garden awkwardly and break a leg, resulting in a financial war of words regarding compensation between you and your neighbor! Always check that the level of public liability insurance contained within your policy is adequate enough to keep up with the cost of compensation awards being awarded in today’s courts to third party accident victims.
If you are going on some kind of extended leave (business, a trip to your holiday pad in the sun, etc.), that will leave your home vacant over a untypically long duration, it is important to check that your policy remains in place during your absence, as some policies lapse if there is nobody about to ‘mind the home’.
Getting value for your money!
Most insurance policies are broadly similar in what they offer, so it is important that you try and seek out those that are less expensive. For instance, it is unlikely that when you are buying a home, the home insurance policy being offered to you by the mortgage lender is the most competitive in the marketplace. As with everything in life, the more you know the better equipped you are to avoid life’s financial pitfalls…so shop around and get as many quotes as you can. You can also use a broker to do this if you do not have the time.
When considering putting in a claim through your insurance company you should first ask yourself if the claim will actually cost you more in the long run by causing an increase in your insurance premiums the following year. This would only come into play if the item you are claiming for has a replacement value just over your excess figure. To back up any claim, try to produce receipts of all your purchases. If you have not been storing these, then start with your next purchase! As stated already, always tell the truth when writing down the details of your claim, or you could lose all insurance coverage…or worse, by being prosecuted for attempted fraud.
And if you are not happy with the way your claim has been handled by your insurance company, call the ombudsman (financial services) to assist you in the matter.
What do you mean that’s not covered!
Do not be surprised to discover that everything you own within the grounds of your property is not covered by a standard home insurance policy. Bikes, green houses, debit/credit cards, ride-on lawn mowers, etc. may fall outside of your policy’s coverage.
Landlords should also make their renters understand that they will need to take out their own contents coverage, as typically landlords rarely cover this in their insurance policy on the rental property. For more information visit our home insurance comparison website.