Excess Clause
The excess is the amount you agree to pay towards any claim before the insurer contributes. Most policies combine two types:
- Compulsory excess: Set by the insurer and non-negotiable — it applies to every claim of that type regardless of any other arrangement
- Voluntary excess: An additional amount you agreed to pay at the start of the policy, typically in exchange for a lower premium
Both excesses are added together on each claim. A policy with a €250 compulsory excess and €250 voluntary excess means you pay the first €500 of any claim. Some policies also apply separate excesses for specific types of claim — for example, a higher excess for subsidence or escape of water.
Exclusion Clause
An exclusion clause removes specific events, circumstances, or types of loss from the scope of cover. Exclusions operate at two levels:
- General exclusions: Apply across the entire policy — for example, war, nuclear contamination, or deliberate acts by the insured
- Section-specific exclusions: Apply only within a particular section of the policy — for example, gradual deterioration excluded from the buildings section, or theft from an unlocked vehicle excluded from motor cover
Where an exclusion clause is ambiguous, the principle of contra proferentem may apply — meaning any ambiguity is interpreted against the party that drafted the clause (the insurer).
Condition Precedent
A condition precedent is an obligation that must be fulfilled for the policy to respond at all. Breach of a condition precedent can invalidate a claim entirely — even if the breach had no connection to the loss.
Common examples:
- Notifying the insurer of a claim within a specified timeframe (e.g. "within 7 days of the incident")
- Reporting theft to the Gardaí before submitting a claim
- Maintaining the property in good repair (relevant to buildings insurance)
Why This Matters
A delay in reporting — even by a few days — can be cited as a breach of a condition precedent. It is worth reading your policy's notification requirements before an incident occurs, not after.
Subrogation Clause
Subrogation gives the insurer the right to step into your shoes and pursue a third party who caused or contributed to your loss — after the insurer has paid your claim.
For example, if a neighbour's burst pipe floods your property and your insurer pays your claim, the insurer can then pursue the neighbour (or their insurer) to recover the amount paid. Subrogation does not affect the policyholder's payout, but it does mean that any payments you receive directly from a third party after a claim may need to be handed over to your insurer.
Contribution Clause
The contribution clause applies when the same risk is covered under more than one insurance policy. If you have two home insurance policies covering the same property and suffer a loss, neither insurer is obliged to pay the full claim — each pays a proportionate share based on the respective sums insured.
This is relevant where a landlord and tenant both insure the same building, or where cover overlaps between a home policy and a travel policy for the same item.
Average Clause
The average clause (also called the condition of average) reduces claim payouts proportionally when the sum insured is less than the true rebuild or replacement cost at the time of the claim. It is most commonly encountered in buildings insurance.
The effect is that the policyholder bears the same proportion of any loss as the proportion of value that was left uninsured. A home insured for €200,000 with a true rebuild cost of €300,000 has only insured two-thirds of the risk — so any claim will be settled at two-thirds of the assessed loss.
Cancellation Clause
The cancellation clause sets out the conditions under which either party can end the policy before the renewal date, and what happens to the premium.
Most Irish policies allow the insurer to cancel mid-term in cases of fraud, non-disclosure, or non-payment of premium — typically on 7 or 14 days' written notice. Policyholders can usually cancel at any time, but the amount refunded depends on the "return premium" calculation in the clause — which may be pro-rata or short-rate (where a cancellation fee or proportion is retained).