| Introduction | |
| This guide is intended to assist you in insuring your home and briefly
explains some of the more important aspects of house insurance.
It also seeks to emphasise the importance of adequately insuring
what is probably your most valuable possession. Remember that home insurance policies differ, some covering more than others; hence the importance of examining your policy carefully and insuring for the correct amount. |
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| Guideline Costs | |
| The costs included in this guide are a guideline to the MINIMUM
value for which you should insure the structure of your house.
Applying these rates to the area of your house will give you a
base, which you should add to in order to cover other costs, such as boundary walls, garages, fitted kitchens, etc. The insurance value for houses varies greatly depending on the type of house, i.e., Georgian, modern, with or without basement, etc. The costs in this guide are intended to cover typical, speculatively built estate-type houses in Dublin, Cork, Galway, Waterford and Limerick, which were built since the 1960s. If you have another type of house, for instance a Georgian or Victorian house, the costs in this guide will not be appropriate to adequately insure your house. If you have a house of this more unusual type, you should have a reinstatement cost assessment carried out by a Chartered Quantity Surveyor. The costs are calculated on a total loss situation, i.e., the house has been totally destroyed and has to be demolished and totally rebuilt. In addition to demolition and reconstruction, the costs also allow for building surveyors’/architects’/quantity surveyors’ fees, and for value added tax at the correct rates at the time of printing this guide. The costs do not include any allowance for contents such as carpets, curtains, loose furniture and domestic appliances. A separate insurance policy for contents is required. |
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| Market Value | |
| It is sometimes thought that the market value of the house, in
other words the price achieved when the property is sold on the
open market, is the value for which the property should be insured.
This is, however, irrelevant as the market value of a property generally has little relationship to the reinstatement value. |
|
| The Average Clause | |
| Unless your property is insured adequately, you may be penalised
under your policy by having to pay a certain proportion of the
reinstatement costs. It is therefore extremely important to have
the property sufficiently insured. Where, for example, the insured sum is only 75% of the total reinstatement cost, you will only receive 75% of the agreed cost of reinstatement, whether the claim is made for partial replacement or total loss. For example, in the case of a house insured for €270,000, where the total reinstatement cost was €360,000, the insured party would receive only €270,000 to reinstate the house in the event of the total loss. The insured party would thus be obliged to provide the balance of €90,000. Similarly if there is a partial loss, which costs €60,000 to repair, the insured party would only receive 270,000 360,000 X 60,000 = 45,000 and would have to provide the balance of 15,000. |
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| Reinstatement | |
| Most insurance is intended to leave you in substantially the same
position after the damage as before. Therefore, in order to avoid
problems with deductions for wear and tear, you should make
sure that your policy includes cover for full reinstatement, or “new for oldâ€. |
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| Index Linking | |
| The costs included in this guide are based on building rates as of
May 2008, and do not allow for inflation during the duration of
the policy, or the period between any loss occurring and
reinstatement. You should ensure that your policy is index linked to avoid any shortfall that might otherwise occur. Note This leaflet was prepared by the Quantity Surveying Division of the Society of Chartered Surveyors. Whilst every effort has been made to ensure the accuracy of the information contained in this publication, the Society of Chartered Surveyors does not accept liability of any kind in respect of, or arising out of, the information, or any error therein, or the reliance any person may place therein. Copyright © The Society of Chartered Surveyors 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the Society of Chartered Surveyors. |
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| Index Linking | |
The Society of Chartered Surveyors is the professional representative
body for Chartered Surveyors practising in the Republic of Ireland.
The Society currently has over 2,200 qualified members, practising in
all areas of the property and construction industries. - construction cost advice from budget estimates to final The Society is a founder member of the European Society of
Chartered Surveyors, with headquarters in Brussels, and with 17 other
member associations of Chartered Surveyors throughout Europe. In
addition, the Society also represents Irish construction and property
interests in many other European organisations. The Society is a
founder member of the Construction Industry Council (CIC) and is
also a member of the Forum for the Construction Industry. |