Our analysis of property claims we assessed between January and the end of August 2026 found that Irish homes with a shortfall in home insurance cover were, on average, underinsured by €83,153. We also found that in one in three cases of underinsurance, homes and contents were only covered for 50% of their rebuild or replacement costs.
With the wetter, colder and stormier months of autumn and winter approaching, now is a good time to check whether your building and contents are adequately insured.
Why does underinsurance happen?
There are several reasons why your home may no longer have the right level of cover. Changes to rebuilding costs, as well as improvements you’ve made to your home, can all affect how much cover you need.
As Donal O’Sullivan, OUTsurance Head of Claims, explains:
“Underinsurance is rarely deliberate. One of the main reasons homeowners are underinsured is simply because they are unaware of the extent to which house rebuilding costs have risen in recent years and the direct knock-on effect this has on how much they should insure their property for. Rebuild costs have fluctuated significantly in recent years due to increases in labour and materials.
As a result, the level of cover selected for homes a few years ago may no longer reflect today’s rebuilding costs or the current value at risk.”
Home improvements can also affect the amount of cover you need. In recent years, tens of thousands of homeowners have embarked on home renovation projects. But you may not realise that a major home upgrade, such as an extension or attic conversion, can increase the cost of rebuilding your property, and therefore the amount you should insure it for.
How can underinsurance affect a claim?
Underinsurance can have a significant impact on the amount you receive following a claim. To show how it works, here’s a simple, notional example. The figures below are for illustrative purposes only.
Say your home would cost €300,000 to rebuild, but you insure it for only €225,000 - this is an insurance shortfall of 25%.
If a storm then causes €40,000 worth of damage to the building and you make a claim, rather than receiving the full amount of compensation, most insurers apply what is known as the ‘average clause’, reducing the payout in line with the level of underinsurance.
In this example, that would mean a payout of €30,000, leaving you to find the remaining €10,000 yourself.
Using the average €83,153 shortfall in cover we identified in our analysis, and assuming the building and contents are only insured for a total of €83,153, the insurance shortfall would be 50%.
If a storm caused a total of €60,000 worth of damage to the contents and building, a payout of €30,000 would be made to reflect the level of underinsurance, leaving you to find the remaining €30,000 yourself.
As Donal explains:
“It’s imperative that homeowners make it their priority now to check that their home is adequately insured as doing so could save them a lot of financial headaches in the months ahead.
Underestimating the rebuild cost or contents in your home could leave you substantially out of pocket if the worst was to happen. At a time of crisis, such as storm damage to your home or a break-in, the value of the peace of mind that comes with having adequate insurance cover in place cannot be underestimated.”
10 steps to help prevent underinsurance
We recommend taking these 10 steps to help make sure your home and contents have the right level of cover.
- Review your home insurance every year
Review the level of cover on your home insurance policy every year.
- Check your buildings sum insured
Make sure your buildings sum insured is right. This is the most your insurer will pay if your home is damaged or destroyed and needs to be rebuilt.
Tools such as rebuild cost calculators from the Society of Chartered Surveyors Ireland can be used as a guide, although these tools provide estimates only.
- Don’t confuse market value with rebuild cost
The market value of your home is not the same as its rebuild cost.
Rebuild costs reflect the expense of reconstructing your home from the ground up rather than its market value. You may want to consider hiring a professional chartered surveyor to give you an up-to-date estimate of the rebuild value of your home.
- Remember the additional costs of rebuilding
When calculating your buildings sum insured, don’t overlook the cost of demolition, rubble removal, professional fees and other associated costs if significant restoration is required.
These costs should all be reflected in your buildings sum insured. It may be worth considering accidental damage cover options when first taking out home insurance.
- Include any home improvements
Make sure you factor in any extensions, renovations, attic conversions or structural improvements completed since your home insurance policy was arranged.
You should also consider changes in building costs over time.
- Tell us before major renovations
Before proceeding with any major renovations, notify us.
We’ll want to know details of the work being undertaken and may restrict your cover while the work is ongoing.
- Check your contents sum insured
Make sure your contents sum insured is correct. This is the most your insurer will pay if the contents in your home are damaged or destroyed.
One way to do this is to go around your home and make a detailed list of your contents. Then estimate how much it would cost to replace each item today. These estimates can help you gauge the total contents sum insured you should have on your policy. Checking if your garden equipment is covered is also advised here, and something worth adding if not.
- Consider listing valuable items individually
If you have valuable contents in your home, such as expensive jewellery or antiques, consider listing them individually on your policy, and checking your portable items cover options.
This can help ensure they are covered for their full replacement value and that cover applies within the home and outside the home.
- Keep valuations up to date
Get valuable items such as jewellery or antiques valued regularly to ensure they are properly covered in the event of loss or theft.
You may need to have these items valued by a professional valuer to ensure they are covered for the correct amount. Be sure to keep a copy of any valuation certificates.
- Check your unoccupancy limit
Check the unoccupancy limit on your policy, particularly if you intend to take an extended holiday away from home - a month or more. Most home insurers have an unoccupancy clause, which means they typically won’t cover you if your house is broken into after it has been left unoccupied for more than 30 days in a row. This limit varies by insurer, so check the terms of your policy before you go away.
Underinsurance can leave you facing significant costs if your property or contents are damaged.
Taking some time to review your cover, particularly after making home improvements or changes to your circumstances, can help make sure your policy reflects the current rebuild cost of your home and the replacement value of your contents.
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Source: Our analysis of property claims assessed between January 2026 and the end of August 2026.
Footnotes
- Between January 2026 and end August 2026.
- Various research points towards this, including the recent ILCU credit union sentiment survey: Irish Consumers Focused on Home Improvements as they struggle to move Property and SEAI figures which show there has been a doubling in grant applications for home energy upgrades since last year.