Home insurance is essential for protecting your property and your peace of mind. Yet many homeowners in Ireland are underinsured. Recent estimates show that Irish homeowners have a combined €39 billion underinsurance gap. Most people do not update their policies as rebuilding costs rise. Understanding your policy and the true cost of rebuilding can help ensure your home is fully protected. Knowing your coverage also helps you avoid unexpected expenses in the event of damage. 

  

Why Underinsurance Happens 

  

One of the main reasons homeowners are underinsured is that they do not update their policies regularly. Many assume that their existing coverage is enough. Rising construction costs, labour shortages, and inflation mean the cost to rebuild a home has increased sharply in recent years. For example, the rebuilding cost of a three-bedroom semi in Dublin has risen by 35% since 2021. In the northwest of the country, it has increased by as much as 54%.  

Other factors include not accounting for extensions, garages, or loft conversions. Some homeowners rely on the market value of their property rather than the actual rebuild cost. This can leave significant gaps in coverage. Underestimating the cost of labour and materials can also create a problem. 

  

The Risks of Being Underinsured 

  

Being underinsured can have serious consequences. If your home is damaged by fire, flood, or storm, your insurance payout may be reduced proportionally to your coverage level. This means you could face paying hundreds of thousands of euros out of pocket. The Central Bank of Ireland has highlighted these risks. They urge insurers and brokers to explain clearly the potential impact of insufficient cover. 

Underinsurance can also affect claims for burst pipes, storm damage, and accidental damage. Without adequate coverage, you may struggle to repair or rebuild your property. Homeowners often discover the gap only after a claim is made. At that point, the financial impact can be severe. 

  

How to Avoid Underinsurance 

   

1. Review Your Rebuild Costs Regularly – Check the current cost to rebuild your home. The market value of your property does not reflect the true cost to rebuild. You can use a rebuild cost calculator to help you.  
2. Factor in Inflation and Labour Costs – Construction prices can rise quickly. Adjust your coverage at least once a year. 
3. Consult a Professional – Insurance brokers or surveyors can calculate accurate rebuild costs. They can recommend the right level of cover for your home. 
4. Understand Your Policy Terms – Pay attention to clauses such as the “average clause”. It reduces payouts if your home is underinsured. 
5. Include All Parts of Your Property – Don’t forget garages, lofts, extensions, or outbuildings. Leaving them out creates coverage gaps. 

  

Benefits of Full Coverage 

  

Having the right level of cover for your home gives peace of mind. You know that if disaster strikes, your house can be fully rebuilt without unexpected costs. Full coverage protects your family, belongings, and financial security. It also ensures a faster recovery after events such as fires, floods, or storms. Regularly reviewing your policy and updating it as needed prevents costly surprises. Even small adjustments can make a significant difference. 

Underinsurance is a widespread problem among Irish homeowners. However, it is avoidable. Regularly reviewing your rebuild costs, consulting professionals, and understanding your policy can help you make sure your home is fully protected. 

At Insure My House, we make it easy to find home insurance in Ireland that suits your needs and gives you the right level of cover. Don’t leave your property at risk. Get a fast, competitive quote today and make sure your home is fully covered.