The sharp increase in building costs, driven by inflation, supply chain disruptions, higher demand for construction materials and labour, has significantly impacted home insurance premiums.
Over the last few years, costs for building materials have risen by approximately 45% and labour costs have also increased significantly, leading to higher expenses for repairing and rebuilding properties. These rising costs have put pressure on insurers to adjust premiums accordingly to ensure they can settle all insured claims adequately.
A study by the Central Bank in 2022 highlighted that more than 16% of Irish households were underinsured, likely due to not having updated their policies to reflect current rebuilding costs. As a result, many are exposed to potential shortfalls if they need to make a claim – often significant ones which could be financially catastrophic.
To help manage these challenges, Glennon Car and Home at Arachas, which offers car and home insurance schemes for Engineers Ireland members, has explored the causes of these increases. It has outlined some practical steps members can take to manage rising home insurance costs, while still remaining fully covered.
“With rising costs across the board, it’s important to ensure your home insurance is adequate to keep up with inflation, so you're not left out of pocket in the event of a claim – but you also want to make sure you are not paying for cover you don't need,” said Matt Nicholson, general manager, Personal Affinities at Glennon Car and Home.
Reviewing cover and managing costs
Below are some key tips from Glennon Car and Home to help ensure you have adequate whilst getting the best value on your premiums:
- Review rebuild costs: Review your buildings sum insured to reflect current rebuild costs. Tools like the Society of Chartered Surveyors of Ireland Rebuild Calculator can help, or consult a surveyor for an accurate estimate;
- Adjust for inflation: check if index linking has inflated your sum insured beyond actual rebuilding costs. Discuss necessary adjustments with your insurer to avoid over-insurance;
- Evaluate contents cover: Ensure your cover for personal belongings is accurate. If the contents amount is linked to the Buildings Sum verify if it is appropriate;
- Reassess optional extras: Consider whether you still need 'All Risks' or Accidental Damage cover. For instance, if you have valuable jewellery that you no longer take out of the home, it may be worth adjusting your cover to reflect this;
- Implement security measures: Installing security alarms can lead to premium discounts.
Reviewing your policy for potential savings
“Whether Engineers Ireland members are existing customers or have their policy elsewhere, Glennon Car and Home would be happy to evaluate cover requirements with members policies and provide practical advice to suit their needs," added Nicholson.
"For example, if a member has a high-priced bike insured under ‘All Risks’ but its value has decreased or is no longer in use, they might be paying for unnecessary cover. Glennon Car and Home can help identify such opportunities to adjust cover and potentially reduce premiums.”
Get a review today
Glennon Car and Home at Arachas are offering Engineers Ireland members a detailed review of their home insurance policies. To explore how you might get better value while maintaining your cover, call (045) 247305 today or visit their webpage for Engineers Ireland members and leave your details for a call-back.
Arachas Corporate Brokers Limited t/a Arachas is regulated by the Central Bank of Ireland. Company registration number: 379157.