First things first, congratulations!
Buying your first home in Ireland today is no small achievement. It probably took time, patience, and a whole lot of resilience to get you here. For most first-time buyers, that means years of saving, navigating banking bureaucracy, and searching for the right house at the right price in the right place.
If this sounds like you, you’re not alone. In fact, you’re part of the biggest group of buyers in Ireland, making up around 60% of all mortgage approvals. Once you’ve made it through that process, you probably think the bulk of the paperwork is over.
Unfortunately, there’s still a bit to go, and some of it can get confusing, especially if you’re under pressure to move quickly and faced with unfamiliar terms. That’s why we prepared this handy guide to home insurance in Ireland, complete with simple answers to common questions.
That way, when it comes time to sign on the dotted line, you’ll be ready to go.
Do I need home insurance before I move in?
The short answer is yes, if you have a mortgage. Unlike car insurance, home insurance is not a legal requirement in Ireland. But if you are buying your home with a mortgage, your lender will require you to have at least buildings insurance cover in place before you drawdown your mortgage.
This is to protect their investment, in case the property (which is security for your loan) is damaged or destroyed while you’re waiting to move in. It’s also because it makes sense; there’s a reason why more than 90% of homeowners in Ireland choose to put home insurance in place.
Your home is probably the largest purchase of your life, as well as a place of security and comfort for your loved ones. You’ll want to protect it.
Do I have to take the home insurance offered by my mortgage provider?
No. you don’t. In fact, it pays to shop around.
Although you’ll probably be offered a quote for a home insurance policy during your mortgage application process, you don’t have to accept it. You’re free to choose your own insurance provider, as long as the policy meets your lender’s requirements. That means you can:
- Compare home insurance quotes
- Choose the level of cover that suits your home
- Avoid being locked into a more expensive or less suitable policy
Although it probably feels like just another hoop to jump through, it’s very important you take the time to research your options, understand what you’re buying and ensure you have the right policy in place.
What’s the difference between buildings and contents insurance?
It’s helpful to think of home insurance as an umbrella term for the policy that helps protect your home. According to the Competition and Consumer Protection Commission (CCPC), a home insurance policy can include one or more of the following cover:
- Buildings insurance, which covers damage to the physical structure of the home, such as walls, roofs, permanent fixtures and fittings
- Contents insurance, which covers loss or damage to the contents of your home
- All-risks cover, which covers loss or damage to valuables (even when it takes place outside your home)
- Liability insurance, which covers injury to other people in or around your home
If you have a mortgage, you will have to buy at least buildings insurance. While many households add contents insurance too (to help protect high-value items like TVs, jewellery, and more), that’s up to you and your individual circumstances. You can read more about it here or contact our team to talk it over.
What does “rebuild cost” mean?
These are two small words that carry a lot of weight. Rebuild cost is the actual cost of rebuilding your house from scratch in the event of partial or total loss. It’s not the price you paid for your house, or even a future market value.
In an era of regularly increasing construction costs, it’s very important that you pay a lot of attention to this figure on your insurance policy paperwork.
The most accurate way to ensure you enter the right rebuild cost sum is to ask a surveyor to help. If you already engaged one to provide you with a building survey or a snag list, they may be familiar with your property and will have an up-to-date understanding of current building costs. Or, you could use the calculator provided by The Society of Chartered Surveyors Ireland (SCSI).
If you don’t enter an accurate rebuild cost, you run the risk of being underinsured, which we’ll explain next.
What does “underinsurance” mean?
Underinsurance is a very serious issue that’s been steadily increasing over the last five years.
It’s what happens when a property and/or its contents are insured for less than the value it would cost to rebuild, reinstate, or replace it. While this may sound like an administration error, it can have devastating consequences in the event of an actual insurance claim.
For example, if you insure your new home for €400,000 (the price you paid) but the actual rebuild cost is €500,000 (based on current costs), you are underinsured by €100,000, or 20% of the actual rebuild cost in the event you need to make a claim.
Therefore, in the event of a total loss, by fire, for example, you will only receive 80% of your claim — not enough to rebuild your house and give your family back a home.
Take some time to make sure that the figures on your policy paperwork are accurate to ensure complete peace of mind.
What is an excess, and how could it affect me?
An excess is the amount you agree to pay towards a claim before your insurer covers the rest. Most home insurance policies come with some level of excess.
For example, if bicycles (sometimes referred to as “pedal cycles” in policy documents) are covered under your home insurance, you may have to pay the first €125 of a claim if your bike is stolen. If the bike was worth €500 and you’re claim is valid, your insurer will pay the remaining €375.
You can also choose a voluntary excesses, which means you agree to pay a higher excess in the event of a claim occurring, but enjoy a lower premiums as a result.
If you’re unsure what’ll work best for you, talk it through with your insurance provider.
What does a standard home insurance policy usually include?
Most home insurance policies in Ireland will include protection against common risks such as:
- Fire
- Storm damage
- Water damage
- Theft
But (and it’s a big ‘but’) not all policies are created equally. Cover levels, exclusions, and benefits can vary significantly between providers, so it’s important you compare like for like when reviewing your options.
You should also check to make sure that your provider will be there for you should the unexpected happen. An established reputation for reliability and easy access to emergency support is important. For example, RedClick has 187,000 satisfied customers, more than 400 employees in Ireland, and a solid history of service, with 97% of claims solved with the help of a dedicated Claims Handler.
If you’re looking for an affordable home insurance quote, get in touch with us today. As a first-time buyer we are here to support you and get you started. We can issue you with the letter of interest / Insurance Protection letter you may need for your mortgage provider, help you get a quote, discuss your cover options and at a competitive price.
Warmest congratulations on your new home. Let us help you protect it. 🏡
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