Homeowners are wasting hundreds of euro on the wrong insurance for their property, it was revealed today.
Following a survey of the market, the Financial Regulator warned most people either over-insure or under-insure their homes. They could be saving €320 a year by reading the small print and shopping around, the report said.
Mary O'Dea, the regulator's consumer director, said people should insure their home for the amount it would cost to rebuild it - not its market value.
"If your home is insured for too little and is damaged or destroyed, your insurance policy may not pay out enough to cover the cost of repairing or rebuilding it," she said.
"If your home is insured for too much, you are paying a higher premium than you need to pay, and you will not get any extra benefit when you make a claim.
"This is called the 'reinstatement value' and is different to the market value of your home, which is the amount you would get if you sold it."
The regulator warned that market value includes the value of the land the home is built on and location but that these are not included in the rebuilding cost.
The regulator's survey compared the cost of insurance for six homes in counties Roscommon, Meath, Waterford, Dublin and Clare from the main providers in the market.
The largest saving is for a 130-year-old, three-bedroom Victorian terraced house in Dublin 8. The rebuilding cost is €550,000, and the contents are worth €75,000. Quotes on the property range between €520 with Quinn Direct and €838 a year with Eagle Star.