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Homeowners warned to review their insurance cover as rebuilding costs go through the roof

Construction costs are continuing to rise due to supply chain difficulties and increases in the price of building materials

Charlie WestonIndependent.ie

Homeowners have been warned they could end up seriously out of pocket if they do not review the insurance cost of rebuilding.

Costs have shot up in the past year by as much as €57,000 for a standard, three-bedroom, semi-detached house.

It is now more important than ever to examine the rebuilding part of home insurance cover, the Society of Chartered Surveyors Ireland (SCSI) said.

National rebuilding costs have increased by an average of 21pc over the past year because of construction inflation.

The SCSI has updated its annual House Rebuilding Guide, which is used by homeowners to calculate the costs for home insurance purposes.

In the latest edition, the increase in rebuilding costs ranges from 14pc in Dublin to 26pc in the north-west.

The SCSI said it was important to note that the specifications and designs used for six house types had been updated this year and, as a result, not all the reported increases could be attributed to construction inflation.

Kevin Brady, the chair of the quantity surveyors professional group in the SCSI, said rebuilding costs had increased because of supply-chain difficulties and increases in the price of materials.

“Although pricing pressures on certain materials such as timber, plasterboard and insulation have eased slightly, rising fuel and energy costs are continuing to affect the supply chain,” he said.

Mr Brady said this is a direct result of the war in Ukraine and is leading to sustained cost rises.

“Coupled with these material price increases, labour shortages show no sign of abating and are also pushing up rebuilding costs,” he added.

The SCSI guide shows that rebuilding a standard, three-bed, semi-detached house, if it were to burn down, has gone up by nearly €57,000 in Waterford in the past year.

In Dublin, there has been a €44,000 rise in the rebuilding cost.

North-west houses cost an extra €55,000 to rebuild, while the cost in Cork is €48,500.

SCSI president Kevin James said homeowners who are not adequately insured might be penalised under their policy by having to pay a proportion of the reinstatement costs.

“Where the insured sum is only 75pc of the total reinstatement cost, you will only receive 75pc of the agreed cost of reinstatement, whether the claim is made for partial replacement or total loss,” Mr James said.

He added that if a house is insured for €270,000, where the total reinstatement cost was €360,000 the insured party would receive only €270,000 to reinstate the house if there was a complete loss.

The House Rebuilding Calculator and the 2022 Guide to House Rebuilding Costs are available for free at scsi.ie.

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