Given this confusion and the fact that only 1 in 10 surveyed had a professional reinstatement valuation carried out on their home raises huge question marks over the accuracy of the home insurance cover that is in place nationwide in Ireland.
The Key Findings of the Home Insurance Survey carried out by Buildcost are as follows:
Only 10% of homeowners surveyed have had a professional reinstatement valuation carried out to calculate the reinstatement cost of their home.
90% of homeowners surveyed either "don't know" how the reinstatement valuation cost was calculated or have "self-calculated"the reinstatement valuation costs of their home.
74% of homeowners surveyed feel that they are adequately or over insured despite only 10% having had a professional assessment of their reinstatement valuations.
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The terms 'House values' and 'reinstatement valuation costs' is causing confusion and are being mixed up.
The survey carried out by Buildcost shows clearly that there are huge levels of confusion about how homeowners calculate the reinstatement cost of their home.
Speaking about the survey findings, Buildcost Director Liam Langan said: "The home reinstatement valuation assesses the cost of reinstating or constructing the home to its original condition in the event of destruction. The main purpose of our survey was to find out how the homeowner's reinstatement valuation was calculated and when it was last reviewed. The comments in the detailed survey that we carried out with 10 homeowners indicate that there is confusion between the term reinstatement valuations and house values and quite often the two are becoming mixed up. This confusion coupled with only 10% of homeowners having had professional assessments carried out casts a huge question mark over the accuracy of the amounts that homeowners have their homes insured for.
"Over the past 12 months, Buildcost have carried out numerous professional reinstatements on commercial properties. It became apparent that many clients had not reviewed the reinstatement costs of their property for some time and in certain instances as long ago as 10 years. The majority of the properties that Buildcost assessed were over insured, mainly due to the reinstatement valuations being calculated at a time when construction / re-building costs were on the rise or when tender rates were at their peak in the first half 2007 (in line with the construction boom) and not being adjusted in line with current tender rates. Based on these findings on commercial properties, we decided to conduct a survey with homeowners to see if the same was true with homes."
(CD)
