Over half of Irish homeowners have not checked the rebuild cost of their homes in the last year, despite inflationary pressures leading to a surge in construction-related costs.
That is according to the findings of new research by Allianz Insurance.
The Home Rebuild Research Study reveals that 23% of all Irish homeowners have never checked the rebuild cost of their home, while only 44% have done so in the previous year.
The results suggest that many Irish homeowners could potentially be underinsured on their properties due to the sudden and unexpected increase in the cost of building materials, as recently reported by the Central Statistics Office.
The study reveals a knowledge gap among Irish homeowners in understanding how their properties are insured, with two-thirds either unsure or totally in the dark about the difference between the value of their property and the rebuild cost.
Over three-quarters of the homeowners surveyed have never contacted their home insurance provider to better understand the value of their home versus the rebuild cost.
Allianz explained that the market value is what the market dictates it will cost to buy someone’s home, which is different to the rebuild cost of a house should it be damaged or destroyed.
It said underinsurance may arise where the current rebuild in an insurance policy may not reflect the current costs of repair or rebuilding at today’s rates.
It explained that the amount a customer has their home insured for is known as the "sum insured" and it is what the insurance company will put aside as a budget for repairs at today’s prices for materials and labour.
Geoff Sparling, Chief Customer Officer at Allianz, said they want customers to understand how inflation related to the construction sector in Ireland could affect them.
"We encourage all our customers to check the sum insured on their properties on a regular basis to make sure they have the appropriate level of cover in place," he said.
A House Rebuild Calculator is available on the Society of Chartered Surveyors Ireland's website and will help you calculate the rebuild cost of your house and provide you with an estimate.
CSO figures show there have been significant increases in building materials such as timber, cement, electrical fittings, plaster and glass over the last year.
Labour costs in the construction industry are also expected to rise over the coming months.
