VERY few people read let alone understand the small print when they take out insurance for property. Even if you insure a building for ‘all purposes’ including acts of God (rain, floods etc) be sure that the insurance company has its back covered to avoid a reduction to your claim. Recent events have come to our knowledge leading us to express the following:
Excess: There is an excess and it is up to the insured to place the amount of the excess. The higher the excess, the lower the insurance premium. Do not be lured by this, and accept a minimum amount of €100-€500 depending on the value of your property.
Vacant properties: Properties that are vacant for more than 30 days are not covered. So with holiday homes, notwithstanding that you think they are covered, if you cannot prove your property was occupied for at least 30 days, you are not covered. Opt for the clause to cover this as well be it for a slightly higher amount.
Bush fire: If your property is damaged by fire caused by the surrounding area – from a neighbor or bush fire etc – and your property is damaged, your property will most likely not be covered, opt to have this included.
New for old: When a client of ours who had his parquet floor damaged as a result of flooding, the insurance company would not pay for its replacement cost since the replacement floor would be new, as opposed to the existing one (4 years old) which was old. The standard approach is for the insurance company to discount a percentage from the replacement cost for ‘old’ items. Opt to have clearly the reinstatement cost as new, or even depreciated provided that amount you receive can cover the damage.
Electrical goods: Electrical appliances that cause damage to the property are not covered if a property is unoccupied and you should have all electrical appliances turned off while you are away – opt to have it covered.
Third party insurance: A major issue for all owners is to have an insurance cover in the event a visitor suffers damage notwithstanding that the visitors may be trespassers.
Tree damage: An aged tree fell into the neighbour’s ground but no building damage was caused, but the neighbour demanded compensation for the damage to his garden. It is not a matter of a major amount but both being stubborn the case is leading to the courts and the tree owner’s insurance does not recognise any responsibility.
Subsidence: As we have previously reported, the owners claimed for damage caused by the soil subsidence. The insurance company claims it is not covered and compensation should be sought from the developer/architects/contractors. A mess since no one believes that this will happen to his own property.
Over insured: In ending if a property is underinsured (e.g. a house has a replacement cost of €300,000 and you insure the property for €100,000), the insurance co will pay one third of the whole the cost of replacement for any item. If insured for more the insurance company has no problem to take the fee on and bother with it later coming up with all sorts of excuses.