Underinsurance: The Most Expensive Mistake
Underinsurance occurs when you insure your home for less than its true reinstatement cost — the cost to rebuild it from scratch, including foundations, materials, and labour at today's prices.
Building costs in Ireland have increased significantly since 2020. A home insured for €300,000 three years ago may now cost €420,000 to rebuild. If you make a claim under an underinsured policy, the average clause (see Hidden Clauses) reduces your payout in proportion to the underinsurance gap.
Action Required
Use the Society of Chartered Surveyors Ireland (SCSI) House Rebuilding Cost Calculator to check your reinstatement value. Do this every two years — and after any significant renovation.
Flood Cover: Often Not Standard
Standard Irish home insurance policies may exclude or limit flood cover, particularly in areas identified as flood risk zones by the Office of Public Works (OPW). If you are in a flood risk area, your insurer may:
- Exclude flood entirely from the policy
- Apply a significantly higher excess for flood claims (€5,000–€15,000 is not uncommon)
- Cap the maximum flood claim at a level below your building sum insured
Check the OPW flood risk mapping tool at floodinfo.ie to understand your property's flood history. Disclose this to your insurer — non-disclosure of a known flood risk can void your policy.
Subsidence and Ground Movement
Subsidence — sinking or shifting of the ground beneath your home — is covered by most Irish home insurance policies, but with significant caveats:
- Compulsory excesses for subsidence claims are typically €1,000–€2,500
- Gradual subsidence may be excluded if not reported promptly
- Subsidence caused by tree roots (from your own trees) may trigger a subrogation action
- Clay shrinkage during dry summers is covered by some policies, excluded by others
Accidental Damage: Read the Small Print
Accidental damage cover sounds comprehensive but is almost always subject to a specific list of included and excluded events. Common exclusions within accidental damage cover:
- Damage caused by pets (scratching, chewing, fouling)
- Damage to items used outdoors
- Electrical or mechanical breakdown
- Damage while a property is being let to tenants
- Damage caused by renovation or building work
Note
Accidental damage to buildings and accidental damage to contents are often sold as separate add-ons. Buying one does not automatically include the other.
Unoccupied Property Clauses
Most home insurance policies limit cover when a property is unoccupied for more than 30–60 consecutive days. During extended unoccupancy (holidays abroad, hospital stays, probate periods):
- Theft cover may be suspended or require evidence of forced entry
- Escape of water claims may be excluded
- Malicious damage cover is typically excluded
If you know a property will be unoccupied for an extended period, notify your insurer immediately. Many will add an unoccupied property endorsement for a modest fee.
High-Value Items and Specified Possessions
Standard contents policies apply a single-item limit — typically €1,500–€2,500 per item. Jewellery, art, bicycles, sports equipment, and electronic equipment above this threshold are not covered unless specifically listed on the policy schedule with their individual values declared.
Items regularly taken outside the home (jewellery, laptops, cameras) require "all-risks" cover, which is different from standard contents cover and must be added separately.