It’s double trouble for home owners who have knowingly or unknowingly underinsured their property.
Paul Murchan, Director, Gullion Ltd said, “Latest reports show that one in six claims are not being paid in full because policyholders have not adjusted their sum insured to reflect inflating building costs, whilst others are intentionally low balling the value of their home to try to reduce household bills as the cost of living crisis continues.
“Unfortunately we witness the reality when policyholders make a claim on an underinsured property, leaving them, in many instances, grossly out of pocket. Insurers can reduce the pay out in proportion to the percentage the home is underinsured and this reduced amount applies to all types of claims – repair works, partial rebuild or in extreme cases a full rebuild.
“If the cost of rebuilding a home is £300,000 but the policy only insures the property for half of this at £150,000, then at 50% less, an insurer can only pay out 50% of the total cover at £75,000. This leaves the policyholder with the huge shortfall needed to reinstate their home. We would therefore encourage all home owners to take time to review their cover.
According to the Society of Chartered Surveyors, the national average cost of building a home in Ireland has increased by 21% – a firth more than in the previous year so many policyholders will automatically have an inaccurate sum insured unless they have adjusted their policy.
Aviva suggests that fewer than one in ten who have been warned by their insurer that their property might not have sufficient cover, have taken any action and according to the survey of 600 homeowners conducted by iReach Insights nine times more men say they are willing to take a chance that nothing will happen, than women.
With this reported level of risk among policy holders, turbulence within the insurance claims market looks set to continue.
There are online calculators available to help policyholders ascertain the most accurate value of their home. Cover can be increased at anytime so policyholders do not have to wait on their insurance renewal date to adjust their level of cover.
Help with identifying a more accurate sum insured can be found at:
Northern Ireland – Insurance Rebuild Calculator
Ireland – Insurance Rebuild Calculator
In the unfortunate event where you need to make a claim, contact Gullion Ltd Loss Assessors and Surveyors on 028 3082 8838. Regulated by the Central Bank of Ireland and authorised and regulated by the Financial Conduct Authority we will negotiate the best settlement on your behalf to ensure you achieve your full entitlement, under the terms and conditions of your policy. To reduce stress and streamline your claim, restoration works is an optional extra service which we also provide.
Gullion Ltd – you’re number one choice for insurance claims. For more, Gullion Ltd can also be found on Facebook, Google, YouTube and Twitter.