What is the sum insured on a self-build policy?

How it works in Ireland

Your policy schedule lists a sum insured against each item covered, for example the works themselves. The insurer will not pay more than that figure for a loss. One published self-build wording starts from an “Estimated Original Contract Price”, a valuation of the project at the start, and counts materials you supply yourself as part of the insured works.

The Central Bank explains the risk on ordinary home insurance: if the sum insured is less than the cost of rebuilding, an average clause can reduce a claim by the proportion you are under-insured. Its example is a €200,000 rebuild insured for €100,000, which leaves you 50% insured. Check whether your self-build wording has a similar clause before you rely on a low figure.

Build the figure from the project budget rather than from the site price. Include the foundations through to finishes, materials you buy directly, and the value of labour you do not pay for in cash. Leave out the land, which is not part of the works. Ask whether the cover increases as costs rise through the build, and when you are asked to confirm the figure again.

If your premium is adjusted at the end of the policy period from figures you declare, keep accurate records of spend as you go. Your broker can tell you what the insurer will ask for.

A common mistake

Using the contract price as the sum insured when you supply some materials or do some of the work yourself. The contract price leaves those out, so the figure is lower than the cost to rebuild. Give your broker the whole project cost, then ask what happens to a claim if the figure turns out to be too low.