The Utmost Good Faith Clause
Insurance contracts in Ireland and the UK operate under the principle of uberrimae fidei — utmost good faith. This means you are legally required to disclose all material facts when applying, even if you weren't asked directly.
A "material fact" is anything that might influence the insurer's decision to provide cover or set the premium. This includes prior claims, medical conditions for travel policies, and previous policy cancellations.
Watch Out
Failing to disclose a material fact — even unintentionally — can give insurers grounds to void your policy entirely. This means not just rejecting a claim, but treating the policy as if it never existed.
Subrogation Rights
After paying out a claim, your insurer acquires your legal right to pursue whoever was responsible for the loss. This is standard, but the clause sometimes extends in unexpected ways.
In some home insurance policies, subrogation rights allow the insurer to sue a family member living in your household whose negligence caused the damage — even though they are presumably the people you were trying to protect.
Some policies include a waiver of subrogation for household members. Check whether yours does before assuming your family is covered.
Conditions Precedent to Liability
These are requirements you must fulfil for cover to apply — things like notifying the insurer within a specific time window, or securing your property with approved locks. Unlike general policy conditions, breach of a condition precedent automatically voids the claim, regardless of whether the breach contributed to the loss.
- Report claims within 24–72 hours (varies by policy)
- Fit British Standard locks on external doors (home insurance)
- Immobilise your vehicle when unattended (motor insurance)
- Maintain your property in a good state of repair
Practical tip
Read the "General Conditions" section of your policy carefully. Any obligation listed there as a "condition precedent" is non-negotiable — breach it and the claim fails regardless of fault.
Gradual Deterioration Exclusions
Home insurance covers sudden, unexpected events. It does not cover damage that builds up over time, even if the result is eventually catastrophic. A roof that leaks suddenly after a storm is likely covered. A roof that has been slowly failing for three years is not — even if the insured only notices after a major incident.
Insurers will often instruct a loss adjuster to determine whether damage was sudden or gradual. If evidence of pre-existing deterioration exists — rust, mould, rot — the claim can be partially or wholly rejected.
Average Clause (Underinsurance)
If your property is insured for less than its full reinstatement value, the average clause reduces your payout proportionally. For example, if your home is worth €400,000 to rebuild but you've insured it for €200,000, a claim for €100,000 will only pay out €50,000 — 50% of your claim, reflecting 50% underinsurance.
Building costs have risen significantly in Ireland. Many homes insured five years ago are now materially underinsured. The Society of Chartered Surveyors Ireland recommends reviewing reinstatement values at least every two years.
Wear and Tear Deductions
Even when a claim is valid, insurers may apply a wear and tear deduction — reducing the payout to account for the age or condition of the item before the loss. A five-year-old boiler replaced after an insured event may attract a 40–60% deduction.
New-for-old policies eliminate this for specified items, but these premiums are typically higher. Read the schedule carefully to understand which items are covered on a replacement basis and which on an indemnity (wear and tear) basis.