If you are buying a home with a mortgage in Ireland, you will generally need two types of cover in place before drawdown. Mortgage protection is designed to clear the loan if a covered borrower dies, while buildings insurance protects the structure against insured damage. Contents cover is usually your choice. The important part is arranging each at the right stage of the purchase.
This guide explains what to prepare and when, and what to look for in a home insurance provider.
How to evaluate and select a home insurance provider
Price is a useful first filter, but compare how the policy would respond if you needed to claim.
What is covered, and for how much?
Compare the sums insured, excesses, limits on valuable items and main exclusions. Two policies at a similar price can have different terms. Home insurance generally excludes normal wear and tear, so it does not replace maintenance.
How do claims work?
Find out how to report a claim, whether help is available outside office hours, what evidence is required and whether the insurer can arrange contractors. Read the claims section of the policy booklet.
Who are you dealing with?
Look at recent customer reviews about claims and how clearly the provider explains its terms. You can check a firm’s authorisation details on the Central Bank of Ireland’s register.
Read two or three policy documents side by side. The independent Competition and Consumer Protection Commission (CCPC) home insurance guide can help you compare cover. AA Ireland offers home insurance alongside car, travel and pet insurance and motoring services. Each product has its own terms.
Understanding essential home insurance requirements
Mortgage protection and buildings insurance serve different purposes. Your lender’s conditions and the legal rules behind them also differ.
Before drawdown: mortgage protection
Mortgage protection is life insurance intended to repay the outstanding mortgage if a covered borrower dies during the term. It does not cover damage to the home.
Section 126 of the Consumer Credit Act 1995 generally requires a mortgage lender to ensure suitable protection is in place before providing a qualifying home loan. Exemptions can apply, including certain age, health and occupancy circumstances. Check the specific requirements with your lender. You can arrange cover through a provider other than the lender, provided it meets those requirements. The CCPC mortgage protection guide explains the options.
Before the loan is released: buildings insurance
Home insurance is not generally required by law, but a lender will usually make buildings cover a condition of the mortgage. Arrange it in time to provide the evidence your lender needs before drawdown. Ask your solicitor when the risk of damage passes to you under the sale contract and set the policy start date accordingly; do not assume this is always the day you collect the keys.
Buildings insurance covers the structure against insured events: walls, roof, floors and permanent fixtures such as a fitted kitchen. If you are buying an apartment, the owners’ management company usually holds a block buildings policy. Ask your solicitor for the details and check what your lender requires before buying a separate buildings policy.
Setting the right sum insured
Your buildings sum insured should reflect the cost of reinstating the house, including demolition, clearance and rebuilding, rather than the purchase price. The market price includes the land and depends on local demand.
If your sum insured is too low, an under-insurance clause may reduce a partial claim as well as a total-loss claim. For example, insuring for three-quarters of the true rebuild cost could result in an otherwise valid repair claim being paid at three-quarters of the eligible amount, before the excess, if such a clause applies. The Society of Chartered Surveyors Ireland rebuild calculator is a useful starting point for a standard estate-type house. For an unusual or period property, consider a professional estimate.
Once you move in: other cover to consider
Contents insurance protects your belongings and can be arranged alongside buildings cover or separately. Mortgage lenders generally focus on the building rather than your contents, but replacing a household’s belongings after a fire or burglary can be costly.
Income protection is separate from home and mortgage protection insurance. Depending on its terms, it can replace part of your income if illness or injury prevents you working for a prolonged period. A regulated financial adviser can help you assess whether it fits your household’s needs.
Frequently asked questions
Is home insurance a legal requirement in Ireland?
No general law requires homeowners to hold home insurance. A mortgage lender, however, will usually require buildings insurance under the loan agreement. Mortgage protection has a separate legal basis, subject to exemptions. See our home insurance requirements guide.
When should I arrange home insurance when buying a house?
Arrange buildings cover before drawdown so your lender has the evidence it needs. Ask your solicitor when the risk passes to you and set the start date for that point. The CCPC’s mortgage drawdown checklist lists home insurance and mortgage protection among the final checks.
Does my lender need to be named on my home insurance?
Lenders often require their interest in the property to be noted on the buildings policy. Check your loan offer or ask your solicitor what wording is needed, then tell the insurer when arranging cover.
Do I have to buy mortgage protection from my lender?
No. You can shop around for a separate policy, as long as it meets the lender’s requirements for the mortgage amount and term.
When you are ready to arrange buildings and contents cover, get an AA Home Insurance quote online.
