Is Your Insurance Keeping Up? A New Year Check for Coverage Gaps

The new year brings fresh opportunities to get your finances in order, and your insurance policies deserve a spot on that list. While most Irish drivers and homeowners have the required coverage in place, many are unknowingly underinsured or carrying policies with significant gaps that could leave them facing substantial costs when they need protection most.

Let's walk through what underinsurance actually means, where the common coverage gaps appear, and how you can spot them before they become a problem.

Understanding Underinsurance

Underinsurance happens when the coverage you're paying for falls short of what you actually need to replace or repair your car or home. It's surprisingly common.

The issue often develops gradually. You bought your home five years ago and set your buildings insurance based on that purchase price. Meanwhile, construction costs have risen steadily. That €300,000 rebuild estimate from 2019 could easily be €400,000 or more today. Your premium might have increased slightly each year, but if your sum insured hasn't kept pace with actual rebuilding costs, you're underinsured.

Car Insurance: Where the Gaps Appear

Agreed Value vs Market Value

Many drivers assume their comprehensive car insurance will replace their vehicle if it's written off. However, most policies pay out based on market value at the time of the claim, which can be significantly lower than what you paid or what you owe on finance.

If you bought a car for €25,000 two years ago and it's written off today, you might only receive €18,000 based on current market valuations. If you still owe €20,000 on your loan, you're left €2,000 short plus the cost of replacing your vehicle.

What to check: Review whether your policy offers market value or agreed value coverage. If you've recently purchased a car or have outstanding finance, agreed value or gap insurance can protect against this shortfall.

Windscreen and Glass Coverage Limits

Standard comprehensive policies typically include windscreen cover, but many have excess charges or limits on the number of claims. With Irish weather conditions keeping windscreen repair services busy year-round, it's worth knowing exactly what you'll pay out of pocket.

What to check: Look for your windscreen excess amount and whether there are any annual limits on glass claims.

Personal Belongings and Equipment

That laptop on your back seat, your golf clubs in the boot, or your child's buggy? Standard car insurance usually doesn't cover personal items stolen from your vehicle. You might assume comprehensive coverage protects everything in the car, but the reality disappoints many policyholders after a break-in.

What to check: Confirm whether personal belongings are covered and up to what limit. Consider whether your home contents insurance provides better protection for items outside the home.

Driving Other Cars Extension

Third party cover while driving other cars sounds useful, but this extension often comes with conditions that catch people out. It typically won't cover you driving a partner's or family member's car.

What to check: Verify whether you actually have this cover and read the specific conditions carefully.

Home Insurance: The Hidden Shortfalls

Buildings Insurance and Rebuild Costs

This represents the biggest underinsurance risk for Irish homeowners. Your buildings insurance sum should reflect the cost to completely rebuild your home from the ground up, including demolition, site clearance, and professional fees. This has nothing to do with your home's market value or what you paid for it.

Construction costs have increased dramatically, with materials, labour, and compliance requirements all contributing. The Society of Chartered Surveyors Ireland provides a rebuilding cost guide, but many homeowners set their sum insured years ago and never revisit it.

What to check: Use a rebuilding cost calculator or get a professional valuation. Compare this figure against your current sum insured. The difference might surprise you.

Contents Insurance Undervaluation

Most people significantly underestimate the total value of their belongings. Try mentally adding up everything in your home: furniture, electronics, clothing, kitchenware, books, decorations, garden equipment, tools, and appliances. The total often reaches €50,000 to €100,000 or more, yet many policies provide coverage well below these amounts.

What to check: Do a proper contents inventory, room by room. Take photos and note approximate values. This exercise often reveals that your €30,000 contents coverage should actually be €60,000 or higher.

High-Value Items and Single Item Limits

That engagement ring, your collection of watches, or your premium bicycle might not be fully covered under standard contents insurance. Many policies include single item limits of €1,500 to €3,000, meaning anything more valuable requires separate specification and additional premium.

Art, antiques, jewellery, musical instruments, and sports equipment frequently exceed these standard limits.

What to check: Review your policy's single item limit and list any possessions that exceed it. Get these items specifically listed and valued.

Accidental Damage Coverage

Standard home insurance policies cover specific perils like fire, storm damage, and theft. Accidental damage is often an optional extra. Without it, you won't be covered when your child puts a football through the patio door or you spill red wine on your cream carpet.

What to check: Confirm whether accidental damage is included or available as an add-on. The relatively small additional premium can save significant costs.

Home Office Equipment

With remote working now standard for many Irish employees, home offices contain increasingly valuable equipment. Your employer's insurance might cover company-owned devices, but your personal computer, monitors, printer, and office furniture may not be adequately protected under standard contents coverage.

What to check: Add up the value of your home office setup and verify it's covered. Consider whether you need business equipment coverage if you're self-employed.

How to Conduct Your Coverage Check

Gather Your Documents

Collect your current insurance policy documents for both car and home insurance. You need the full policy wording, not just your renewal notice.

Review Your Sums Insured

For buildings insurance, use an online rebuilding cost calculator or request a professional assessment. For contents, create a detailed inventory. For car insurance, check current market values for your vehicle.

Check Your Policy Wording

Read through the actual coverage provided. Look for exclusions, limits, and conditions. Many people have only ever read their policy schedule, which lists the basics but not the detail.

Consider What's Changed

Have you renovated your home? Added an extension? Bought expensive new items? Changed your car? Life changes often create coverage gaps.

Compare Against Your Needs

Think about what would actually happen if you needed to make a claim tomorrow. Would the payout be sufficient? What would you have to pay yourself?

Making the Necessary Adjustments

If you discover gaps or underinsurance, you have several options:

Increase Your Sums Insured

Contact your insurer to increase coverage amounts. Your premium will rise, but you're paying for genuine protection rather than false security.

Add Missing Coverage

If accidental damage, personal belongings, or other options aren't included, add them if they suit your circumstances.

Switch Providers if Needed

If your current insurer can't provide the coverage you need at a reasonable price, compare other options with us. January is an excellent time for this, as many people renew in the new year and insurers compete for business.

The Real Cost of Underinsurance

Beyond the obvious financial shortfall, underinsurance can trigger the average clause in your policy. If your insurer determines you're underinsured, they can reduce your claim payment proportionally.

For example, if your home requires €400,000 to rebuild but you're only insured for €300,000 (75% of the actual cost), the insurer might only pay 75% of your claim, whatever the claim amount. A €50,000 storm damage claim could result in a €37,500 payout, leaving you to find the remaining €12,500.

Getting It Right for 2026

Adequate insurance coverage provides genuine peace of mind. You're paying premiums every month or year, so those premiums should actually protect you when things go wrong.

At Chill Insurance, we help Irish customers find the right level of cover for their circumstances. Whether you need to adjust your current policy or you're looking for better options, our team can walk you through the coverage you need and find competitive quotes from multiple insurers.

Start your year with confidence that you're properly protected. Get a quote today or review your existing coverage with our team. We'll help you identify any gaps and make sure your insurance actually does what you need it to do.

Ready to check your coverage? Get a free quote for car insurance or car insurance and see how your current coverage compares. Our Irish-based team is here to answer your questions and find the right protection for you.