Tuesday, December 28, 2010
HOME insurance premiums could rise again in 2011 following the adverse weather conditions experienced in the last 12 months.
The Irish Insurance Federation said premiums are driven by claims and any kind of movement in claims would affect premiums.
They said that, historically, Ireland would have been seen as a cheap location for home insurance as it would not be subject to natural disasters. In the last year, however, house insurance costs are up 12% and have soared by 60% in the last 10 years.
Head of the Irish Brokers Association Ciaran Phelan said it’s difficult to say which way premiums will go next year as much will depend on the claims experience relating to this current cold spell. "However, shopping around invariably saves people money on home premiums which is something consumers should bear in mind in 2011," he said.
Managing director with Bonkers Money, David Kerr, said generally there are a couple of factors which would affect home insurance premiums such as the size of the excess, the rebuild cost of the property, the cost of the contents, the value of any specified items.
"Also some companies set default high values to excess to minimise the quote, which might be a factor."
One other significant factor which would reflect their underwriting could be that some companies have more accurate information on their database about environmental risks, such as flooding, he added.
According to a survey from AA, a third of people have reduced their home insurance costs over the last two years. Lower home rebuilding costs were cited by many as their main motivation for reducing their level of cover. This follows the news from the Society of Chartered Surveyors earlier this year that rebuilding costs are down by an average of 9% in Dublin and 7.7% for the rest of the country.
Household insurance manager at www.GetCover.ie Louise Ledwidge said: "Whilst the reduction in house building costs is good news for consumers, home insurance rates have gone up over the past two years by at least 20%. Therefore, you as a homeowner, to get any advantage from the reduction in building costs, must insure that you review the sum-insured on the relevant building itself and amend where necessary.
Insurance companies will not reduce sums insured unless instructed by the homeowner."
If you’re not sure how much to insure your buildings for, check out www.scs.ie for a guide on rebuilding costs.
Ms Ledwidge said to properly value your contents, get a pen and some paper and go from room to room and estimate the replacement value of each item or group of items in the room.
"Total the figure and add at least 10% to allow for error. Don’t forget to include carpets and curtains," she said. "Also, if your home is going to be unoccupied for more than two weeks in a row, remember to turn off the water and heating and, if possible, arrange for a neighbour or relative to check on the property regularly," she added.
Tips for getting the best deal on home insurance:
1. Don’t under-insure. Make sure you have adequate cover for your buildings and contents insurance.
If you underinsure and make a claim, your insurers will penalise you.
2. Don’t over-insure. Might sound obvious but it is important now that house prices are falling to make sure that you don’t overinsure your rebuild costs.
These are based on how much it would take to rebuild your home, and not the market price for your home. If in doubt, check with your insurer — they will be able to suggest a value based on the size of your home in square metres/ feet and your home’s location.
3. Fit smoke alarms, deadlocks and get an alarm if you don’t already have one.
Your insurer will give you a discount for these — and if you say you have them make sure you do or your insurer may deny any claim made.
4. Increase your excess for a bigger discount. The excess is the amount you pay per claim — if you increase the excess from the standard amount you will get a higher discount as the insurer sees you are willing to contribute to the cost of the claim, and you are unlikely to make a claim for smaller incidents.
5. Shop around. You can save hundreds of euro for the same cover — make sure you get at least three quotes and see if the number two and three will beat the number one quote.
6. When you get your policy schedule, read it and make sure the details are correct — if not contact your insurer and get the policy amended.
Read more: http://www.irishexaminer.com/business/adverse-weather-could-hit-premiums-140493.html#ixzz19W7oQxaX