More than likely, a home will be your largest single investment. Therefore, it makes sense that you have adequate home insurance to protect from financial loss in the event of an accident. The most common mistake people make is thinking the “sum insured” or rebuild price is equal to the market value of a property. This is not the case. The rebuild value is based on the cost to rebuild the house should it be burnt down or destroyed. For example a house might sell for €500,000 but it might cost €250,000 to rebuild it.
Before the down turn insurers index-linked the sum insured so that it rose each year to reflect the rise in rebuilding costs. This trend is now reversed and in the last two years the rebuild costs have fallen up to 20% as builders have dropped their prices. This is good news for home owners; revise it downwards and save money on home insurance premiums.
