First Time Buyers Guide to Home Insurance

by Averil @ An Post Insurance | Oct 08, 2019

Realistically, your house is likely your most valuable asset, so it makes sense to have home insurance in case something happens! While you may not be legally obliged to take out home insurance, if you have a mortgage your lender can insist that you have buildings insurance so that you can afford to rebuild your home if it is destroyed.

House sold image depicting hands shaking in front of house

If you are insuring your home and contents, it is very important that you insure them for the correct amounts, in case you ever have to make an insurance claim. The National Consumer Agency (NCA) warns that if your home is insured for too little, your policy might not pay out enough for the full cost of repairing or rebuilding it if disaster strikes.

On the other hand, if your home is insured for too much, your premium may be higher than necessary and you will not get any extra benefit if you have to claim, as you are only covered for the actual cost of rebuilding or replacing contents.

You should only ever insure your house for the amount it would cost to rebuild it (including clearing the site and removal of debris), this is known as the reinstatement value, rather than insuring it for the market value, which is the amount you might get if you sold it. The Society of Chartered Surveyors has a free rebuilding cost calculator available on its website - scsi.ie.

There are 3 main types of home insurance:

  • buildings insurance
  • contents insurance
  • building and contents insurance – the first two combined in the one policy

Buildings insurance generally covers anything you cannot take away with you if you move home. It usually includes:

  • The structure of your home such as the roof, walls, windows and doors
  • Permanent fittings such as tiled or hardwood floors, bathroom fittings and fitted kitchens
  • The garage, and some outbuildings such as a garden shed
  • Garden walls, gates and fences.

You should also remember that if you extend or improve your home, you may need to increase the buildings and contents cover on your policy.

If you do not own your home, for example if you are renting, you should think about insuring the contents of your home. If you live in an apartment and pay management fees, buildings insurance is usually covered within the fees. However, you should still consider taking out contents insurance.

Contents insurance covers the moveable objects in your home. You should insure your contents for the amount it would cost you to replace them if they were stolen or damaged. It is worth taking the time to calculate these costs so that you insure your contents for the correct amount. There is usually a limit on the value you can claim for any individual item. You may need to list certain valuable items, such as jewellery or antiques separately on your contents policy. Make sure to also include the cost of replacing carpets and curtains.   

You should also check whether the contents of your garage or shed are covered under your policy and include the cost of replacing these in your contents figure if they are covered. 

When you buy insurance, it is important to remember that the policy offering the lowest premium is not always the most suitable policy for you. It is essential to read the policy details first to ensure the policy meets your needs and discover what's covered before you sign up.

Even if you don’t have a mortgage and own your home outright, it is wise to have home insurance in place so that you can pay to repair or replace buildings, contents and valuables if there is a burglary, fire or other damage.

And don’t forget to check discounts for house and fire alarms.

An Post Insurance Home Insurance is arranged and administered by An Post Insurance and is underwritten by Aviva Insurance Ireland DAC.