Almost a quarter of Irish mortgage holders have been overpaying for home insurance after mistaking where they needed to buy it.
Irish insurance broker Gallagher recently commissioned a nationwide survey, which was carried out by iReach, to determine how homeowners were approaching the difficult task of purchasing home insurance.
The research found that 24 per cent of mortgage holders wrongly believed they were required to purchase their home insurance through their mortgage lender, with 52 per cent doing so.
While most did so because they thought they had to, one in five said it was due to it being more convenient and 8 per cent believed their lender offered the best price.
Geraldine Kelly, the head of personal lines insurance at Gallagher, explained that getting approvals, meeting solicitors and beating deadlines are all major parts of securing a mortgage, making the process a daunting task.
In the midst of all the paperwork, homeowners often miscalculate the best home insurance option for them.
“It’s concerning that almost one in four mortgage holders believed they were actually required to go through their lender for their home insurance. This is never the case – it cannot be made a prerequisite to getting a mortgage," Geraldine said.
“Banks can often be more expensive on products like home insurance because it’s not what they specialise in – rather it’s an add-on to their main business offering, so they are often not as competitive as other providers.
“As a result, homeowners could be overpaying on insurance due to this common mortgage myth.”
The research also showed that 39 per cent of mortgage holders purchased their insurance from an independent provider because they believed it offered better value, with women making this choice more often than men.
People aged 55 and over were most likely to go through their lender because they believed it was a requirement, while one in ten chose another provider because they had more trust in the brand.
Those in the process of getting a mortgage should use a broker for home insurance, as they can explain factors that are often overlooked, Geraldine counseled.
She also recommended that buyers should shop around for insurance, look beyond the cheapest policy, and make sure it covers the age of the property and the cost of rebuilding the home.
