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Homeowners warned to ensure their property is adequately insured

Home rebuilding costs in Galway soared by at least €30,000 in the past year, according to figures released by the Society of Chartered Surveyors Ireland (SCSI).

The minimum base cost of rebuilding a 3-bed semi-detached home in an estate is now €257,348 in the Galway region, up 14%.

Enda McGuane, President of the SCSI and former managing director of Winters, based in Liosbán in Galway, said it was imperative that homeowners check they are adequately insured to take into account this leap.

The SCSI has a free Home Rebuild Calculator which provides an accurate reinstatement figure. The rebuild figures are based on estate type houses; people with one-off homes or period properties are advised to contact their local chartered surveyor to get a replacement calculation.

Now working with the Land Development Agency in Dublin, Mr McGuane said consumers regularly mix up valuations with rebuilding costs.

“A market valuation is the expected amount another person would pay for your property, the sale price, if it was placed on the open market. The rebuilding cost is the cost or price of building or replacing the dwelling.  The SCSI says these figures are very different so it’s important that the SCSI calculator is not used for valuation purposes so that consumers are not over or under insured.”

Homeowners often don’t fully appreciate the dangers of under insurance. If they are not adequately insured, they may be penalised under their policy and have to pay a certain proportion of the reinstatement costs out of their own pocket.

“Where the insured sum is only 80% of the total reinstatement cost, you will only receive 80% of the agreed cost of reinstatement, whether the claim is made for partial replacement or total loss. For example, in the case of a house insured for €280,000, where the actual total reinstatement cost is €350,000, the insured party will receive only €280,000 to reinstate the house in the event of the total loss. In that situation the insured party will be obliged to provide the balance of €70,000.

Pictured: Enda McGuane of the SCSI: homeowners need to take into account the increase in costs when it comes to insurance.

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