Making Cents: How to buy and claim on your home insurance

The weather and ensuing floods in recent weeks has reminded us of the chaos caused by damage to homes and the importance of being prepared and covered for the worst, writes Gráinne McGuinness

This week, Making Cents asked industry experts what steps to take if your home is damaged and you need to claim on your cover.

Michael Horan, non-life insurance manager with Insurance Ireland said the most important thing is to make contact with your insurer as soon as possible.

“There is no point in the ordinary person trying to deal with a complex situation, such as the recent flooding, and trying to work out what to do,” he said. “Contact your insurer and they will take you through the stages step-by-step.”

If necessary, arrange emergency repairs yourself, particularly if it will prevent further damage. Keep receipts for any work you arrange and evidence of the damage before you repaired it, and let the insurance company take over at the earliest opportunity.

“The insurer will send a loss adjuster to co-ordinate matters. They will assess the damage, organise clean-up and report back to the insurance company.”

Horan warned homeowners not to throw away damaged or ruined items, advice echoed by Rory Callan, managing director of Property Loss Management Ltd: “Don’t dispose of damaged items because your insurance company may need to see them,” he said. “Items can be removed from the home but should be stored somewhere until your claim is assessed.”

“Until they confirm cover [insurers] can’t make a financial payment,” Callan said. “But the loss adjuster will work to establish if there is a claim and then the insurer will usually make an interim payment to the homeowner to get started with repairs.”

Callan recommends that homeowners get independent advice when dealing with a claim, especially for major repairs.

He says an independent assessor will help the homeowner navigate what can be complex wording in insurance documents and ensure they get the cover to which they are entitled.

“The claimant has the right to appoint an independent assessor,” Horan said. “But it is at their own expense.”

The fee for independent help is usually a percentage of the claim; normally in the range of 5% to 10%, depending on the size of the payout.

Homeowners who have had major damage due to flooding need to be aware that the clean-up can take several months. It is vital to ensure the property is fully dried out before starting repairs and it could require specialist cleaning if there has been contamination from flood waters.

If your home is uninhabitable, your insurance should cover alternative accommodation until you can return to the property.

The time to prepare for the worst is not when Met Éireann is issuing warnings but when you are arranging or reviewing your insurance — which you should do annually. Errors or oversights which could cause problems when it comes to claim time.

“The main issue is under-insurance,” Callan said. “Homeowners need to insure for the rebuild cost of their home, not the sale value or the initial build cost. If your home cost €200,000 to build, it will cost more than that to rebuild.” This is because if your home has been damaged or destroyed, due to fire or flooding, the site will have to be cleared before rebuilding can take place.

Not all policies are averaged, but many are. So if you have only insured your home to 60% of the true cost, your insurer could cap your claim at that percentage. Callan also believes Local Property Tax had a negative impact on home insurance.

People estimated their house value conservatively to limit their tax obligation and then used that figure as the basis for their home insurance.

Callan recommends that, when getting insurance, homeowners refer to the House Rebuilding Calculator on the website of the Society of Chartered Surveyors Ireland.

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