Warning that some homeowners are confusing market value with rebuilding costs and overpaying for insurance cover they will not need, while some may not have enough cover.
Monday, 25 July 2016. The Society of Chartered Surveyors has warned that homeowners may be overpaying for house insurance because they are paying for more cover than they can claim in the event that they need to rebuild their home.
Rowena Quinn, Chair of the SCSI Communications Committee and Managing Partner of Hunters Estate Agents, said that she has spoken with clients who were carrying 50% more home insurance cover than they could ever claim – and overpaying on their insurance premium as a result. Ms. Quinn said that the most common mistake that homeowners made was to confuse the market value of a property with its rebuild cost.
By way of example, the average 3 Bed semi-detached (1,023 sq.ft) house in Donegal is €85,000, but the rebuilding cost based on the SCSI House Rebuilding Guide is €117,000. In contrast, a similar property in Dublin could sell for €350,000, but has a rebuild cost of €181,000.
The Society has today launched the latest edition of its annual Guide to House Rebuilding Costs. The guide examines the real cost of rebuilding houses across the country and assists homeowners to insure their home for the reinstatement or rebuilding of the property in the event of a total loss situation, (ie: where the house has been totally destroyed and has to be demolished and rebuilt).
This year’s Guide shows the increase in costs varied depending on location. In Dublin, the average rebuilding costs on a standard home increased by 1.5%, while the average minimum rebuilding costs for a standard house in Cork increased by 2%. However in Galway, Limerick, North West, North East and Waterford, rebuild values have remained static.
Kevin Brady, Chair of the SCSI Construction Cost and Indices Committee said “Increases seen in Dublin and Cork are directly linked to the increase in construction activity seen year on year in Dublin and recently in Cork. However regionally, outside of these areas, rebuilding costs have remained static.”
“Having the correct reinstatement value will not only make certain that you are not over or under insuring your property but will also avoid over-payment when it comes to your home insurance premium. The guide covers the rebuilding of estate type houses with standard finishes. Homeowners with one-off properties or period houses (Georgian or Victorian, etc.) should contact their local Chartered Quantity Surveyor”
According to the guide, the average minimum rebuilding costs for a standard 3-bedroom semi-detached house around the country are as follows:
| Dublin |
€181,071 |
€177 per sqft |
| Cork |
€142,197 |
€139per sq ft |
| Galway |
€140,151 |
€137 per sqft |
| Waterford |
€135,036 |
€132 per sqft |
| Limerick |
€138,105 |
€135 per sqft |
| North West |
€117,645 |
€115 per sqft |
| North East |
€146,289 |
€143 per sqft |
Claire Solon, President of the Society of Chartered Surveyors Ireland (SCSI) said “while we are pleased to note that there has been no significant increase to rebuilding costs since last year, this is highly unlikely to remain the case in the coming years, as house building activity increases and while skill shortages still exist”.
Consumers can access the free 2016 House Rebuilding Cost Guide and Calculator on the SCSI website – www.scsi.ie. or contact a local Chartered Quantity Surveyor listed on the SCSI website if they have any specific queries.