Understanding and Avoiding Under-insurance on your Irish Home


The growing trend of underinsured properties makes homeowners lose significantly on damage claims. Find out how to avoid it and amend your home insurance policy on time.


At PDLA, our experience as loss assessors has uncovered a concerning trend: a significant increase in underinsured properties among the claims we manage. This issue often comes to light too late for the property owners we assist, usually in the midst of the claims process, leaving minimal room to correct the shortfall in insurance coverage

The Rise of Underinsurance

Underinsurance often results from property owners not adjusting their policy's insured value at renewal time as years go by. Given the fluctuating nature of construction costs in the Irish Market, the insured value of a property should be reviewed and potentially adjusted every time a policy is renewed. This step is vital because most insurance policies include an "average clause," which adjusts the settlement of a claim downwards to reflect the degree of underinsurance.


Real-Life Examples of Underinsurance

  • Example 1: A property insured for €200,000 has a rebuild cost of €250,000. This underinsurance of 20% means any claim settlement could be reduced by the same percentage.


  • Example 2: A property insured for €300,000, with a rebuild cost of €400,000, is underinsured by 25%. Thus, a quarter of any claim settlement might be withheld.


  • Example 3: A property insured for €500,000 faces a rebuild cost of €600,000. This underinsurance of 16.67% would reduce claim settlements by nearly 17%.


Ensuring Adequate Coverage

Determining the proper insured value of your property involves more than considering its market price; it requires an assessment of the total rebuild cost. This often includes demolition, site security, adherence to current building codes, inflation during construction, and professional fees.

The Society of Chartered Surveyors Ireland (SCSI) rebuild calculator is a valuable tool for accurately assessing your property's insured value, accounting for various factors such as property size, type, location, and additional features.

Access the SCSI house rebuild calculator here: SCSI House Rebuild Calculator


How PDLA Can Help

As loss assessors and a qualified chartered surveyor, PDLA specialises in helping property owners navigate the complex claims process, ensuring they are adequately prepared and protected against underinsurance. If you're concerned about your property's coverage or if you're facing a claim, our expertise can guide you through ensuring you receive a fair and just settlement.


Concerned About Being Underinsured?

If you're unsure about your property's insurance coverage or if the examples above have raised concerns, it's crucial to take action. Proper insurance coverage is your safety net against unforeseen financial strains in the event of a claim.

For expert advice and support in ensuring your property is adequately insured, contact James Armitage at PDLA. We're here to assist you in every step of the claims process, from assessing your insurance needs to negotiating with insurers on your behalf.


Don't wait for a claim to discover you're underinsured. Reach out to PDLA today, and let us help you secure your property's future.


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