Ever wondering exactly what your home insurance policy covers? Does all the small print confuse you?
You are not legally obliged to take out home insurance but if you have a mortgage, your lender can insist that you have buildings insurance so that you can afford to rebuild your home if it is destroyed. Home insurance is usually sold as a single policy that includes:
Buildings insurance which covers you for damage to buildings
Contents insurance which covers you for loss of or damage to the contents of your home
All-risks cover which covers you for loss or damage to valuables (even when outside your home)
Liability insurance which covers you for injury to other people in or around your home.
It is very important that you insure your home and contents for the correct amount, in case you later have to make an insurance claim.
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There can be considerable differences between policies in terms of what they exclude and the extras included. When you buy insurance, it is important to remember that the policy offering the lowest premium is not always the best. It is essential to read the policy details first to discover what's covered before you sign up.
Consider whether you can get better value by combining buildings and contents cover into one policy. You do not have to take out both buildings and contents insurance from the same provider and it is worthwhile to shop around.
Even if you don’t have a mortgage and own your home outright, it is wise to have home insurance so you can pay to repair or replace buildings, contents and valuables if there is a burglary, fire or other damage.
When you buy a home, you usually need to get two types of insurance:
- Mortgage protection (or some other form of life insurance such as term insurance or whole-of-life insurance). You do not have to buy mortgage protection insurance from your lender but your lender can insist that you have mortgage protection insurance, or another life insurance policy, in place before they will give you a mortgage.
- Home insurance which includes buildings insurance and contents insurance.
You may be offered other types of insurance as well, but these are optional.
Buildings insurance covers anything you cannot take away with you if you move home. It usually includes:
- The structure of your home such as the roof, walls, windows and doors
- Permanent fittings such as tiled or hardwood floors, bathroom fittings and fitted kitchens
- The garage
- Some of the outbuildings such as a garden shed or a farm building
- Garden walls, gates and fences.
If your home is destroyed, your buildings insurance will usually pay for the cost of having to move out or rent another home.
Usually covered under a buildings policy
|Not usually covered under a buildings policy|
Damage caused by:
- Fire, explosion, lightning, or earthquake
- Flooding, storm and subsidence (the ground moving underneath the building), with some restrictions
- Riot, vandalism, or other violent acts
- Burglary or attempted burglary that results in damage to your home or its fixtures and fittings
- Water or oil escaping from a fixed appliance in your home such as burst pipes or a burst water tank
- Vehicles or animals damaging buildings, walls, gates or fences
- Falling trees and branches.
Damage caused by:
- Storms affecting gates and fences
- Flooding or subsidence if your home is in an area where this is likely to happen
- Acts of terrorism
- Wear and tear in the structure or the inside of your home, for example roof damage or water damage caused by a leaking shower
- Someone working in your home. You can only claim for this damage if the person who has caused it has their own public liability insurance.
- You are not covered for any claim that is less than the excess on your policy.
You should insure your home for the amount it would cost to rebuild it, which is called the reinstatement value. This is different to the market value of your home, which is what you would get if you sold it. You can get details of current rebuilding costs from the Society of Chartered Surveyors.
It is important to make sure that you do not insure your home for too much or too little. If your home is insured for too little, your policy might not pay out enough for the full cost of repairing or rebuilding it if is damaged or destroyed. If it is insured for too much, your premium will be higher than necessary and you will not get any extra benefit if you have to claim, as you are only covered for actual cost of rebuilding or replacing contents. If you live in an apartment and pay management fees, buildings insurance is usually covered within the fees. However, you should still think about taking out contents insurance.
This covers the moveable objects in your home, including some flooring. It can be taken out as a separate policy from buildings insurance or combined with it in a single home insurance policy. If you do not own your home, for example if you are renting, you should still think about insuring the contents of your home.
|Usually covered under a contents policy||Not usually covered under a contents policy|
- Loss of or damage to items on a ‘new-for-old’ basis (up to certain limits).
- Accidental damage to household equipment, for example, a TV or stereo - You may have to pay a higher premium for this benefit.
- Loss of or damage to items you temporarily remove from the house, for example, when you move house. Usually, this does not include glass and fragile objects.
- Food that has spoiled in a fridge or freezer because of a power failure or the fridge or freezer breaking down.
- Cash, stolen from your home, up to a certain limit. The policy may also cover money spent on debit or credit cards stolen from your home.
- Any loss or damage that happens when you have left your home empty for a set time, usually more than 30 days.
- Money or valuables stolen from your home if your home was not properly secured.
- Deeds, bonds, bills of exchange, promissory notes (contract of money), cheques, stamps, documents of any kind, manuscripts, medals and coins.
- Motor vehicles and accessories.
- Damage caused by wear and tear.
- Personal belongings that are usually carried outside the home, unless you have specified them.
- You are not covered for any claim that is less than the excess on your policy.
You should insure your contents for the amount it would cost you to replace them if they were stolen or damaged. It is worth taking the time to calculate these costs so that you insure your contents for the correct amount. This is important because your policy may have an ‘average clause'. Download our home insurance contents checklist (pdf) to help you estimate the value of the contents of your home.
Check whether the contents of your garage or shed are covered under your policy and include them if they are covered. Make sure to also include the cost of replacing carpets and curtains.
There is usually a limit on the value you can claim for any individual item. So you may need to list certain valuable items, such as jewellery or antiques separately on your contents policy.
This is an optional extra under most home insurance policies and protects you against loss or theft of, or accidental damage to, personal valuables such as jewellery both inside and outside the home. It will also usually cover items taken abroad for up to 60 days.
You may have to pay extra for all-risks cover, depending on your insurer. If you make a claim, your insurer may choose to either:
- Give you the cash value of the item or
- Pay to repair or replace it.
There are two types of all-risks cover:
- You can choose an overall value for ‘unspecified items’ without having to list each one. For example, you could ask for €5,000 unspecified items cover. Most policies have an upper limit on the value you can insure each unspecified item for – this is the maximum amount you can claim for any one unspecified item. For example, a single item limit of €1,000 will only pay that amount for any article stolen or damaged, regardless of its value.
- If you have items worth more than your insurer’s single item limit, you should think about listing the items you want covered and their value.
Most home insurance policies include liability cover up to certain limits. This means that your policy would cover costs, expenses or fees that you could be legally liable to pay in certain instances. For example:
- Someone visiting your home, or an employee (such as a tradesman or childminder) has an accident, gets ill, is injured or dies, and it was proven that you were at fault. Some policies also include damages that you are liable for but that happen outside your home. For example, you could be covered for damages if you accidentally injure someone with a golf ball.
- Accidental damage to someone else’s belongings that happens because of something you do or fail to do.
You should always check that someone working on your home has their own public liability insurance. If they damage your home, it might not be covered by your own insurance.
Always check your own policy before you make any personal pay-outs for repairs, replacements or compensation. You may be entitled to make a claim, instead of having to pay yourself.
Costs and discounts
The amount you pay for your home insurance depends on three main factors:
- The amount you insure your home for and whether you also insure your contents. The greater the insured value of your buildings and contents, the higher your premium will be.
- The location of your home. Insurers may charge more for homes in areas where there is a high rate of burglary or areas prone to flooding. City home owners usually pay more than rural home owners because there are more burglary claims in urban areas. However, if you have security features, you may get a discount.
- The type of cover and discounts you get. Insurers offer various discounts, which can reduce your premium by a certain amount.
Remember that if you extend or improve your home, you will usually need to increase the buildings cover on your policy. Read more about changing your insurance.
What discounts can you get?
Depending on the provider, you may get a discount if:
- You have made no previous claims or have made no claims in the past three years
- There is somebody over 50 living in the house
- The residents of the house are non-smokers
- A resident is usually in the house during the day
- The house has an alarm (you may get an extra discount if it is monitored)
- You have a smoke detector installed
- You have security locks fitted on doors and windows
- You have another insurance policy with the same company
- Your house is in a neighbourhood watch area
- The person applying is over 40, or in some cases over 50
- The house is more than 10 years old.
Compare insurance quotes using our latest home insurance survey. You can also use our home insurance shopping around checklist to help you make note of costs, benefits and discounts when getting quotes.
Issues to consider
Some tips on what you should be aware of:
Restrictions and exclusions
These are events or situations that are not covered by your insurance policy. While standard exclusions are contained in every policy, specific exclusions and restrictions will vary across insurers - so check with your provider before you sign up.
The excess is the amount that you will have to pay yourself for any claim before your insurer pays the balance. Your insurer will reduce any claim settlement by the amount of the excess stated on your policy. You cannot claim for losses that are less than the excess.
The amount of the excess can depend on the insurer, but normally it is between €100 and €500 for standard claims on a home insurance policy. The excess for subsidence claims is usually higher. You can often get a discount on your premium if you agree to a higher excess.
Many insurance companies automatically increase the amount of your buildings and contents cover when they renew your policy each year. This is called indexation. It helps you to avoid being under-insured as it increases the amount of your cover in line with inflation. However, you should also regularly check the amount of cover you have to make sure you are not insured for too much or too little. In general, people tend to be over-insured for buildings insurance and under-
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