Two In Five People Would Consider Reducing Insurance Cover as Household Costs Rise
New Aviva Insurance Ireland DAC (Aviva) research highlights gaps in people's understanding of home insurance, as cost pressures lead many to consider reviewing their cover, increasing their risk of underinsurance
Key findings:
- 40% would consider reducing their insurance cover if finances became tight, increasing the risk of underinsurance
- Only 17% say they know their homes rebuild cost accurately
- 39% have adjusted their cover or excess in the past year
- 49% say they have experienced challenges estimating contents cover
- In the past two years, just over 17% of Aviva’s home insurance claims involved underinsurance
Two in five (40%) adults say they would consider reducing their cover if their finances became tight, increasing their risk of underinsurance, meaning they could receive reduced payouts if they need to make a claim. That’s according to new research* from Aviva Insurance Ireland DAC (Aviva).
The Aviva study, conducted among 1,000 adults across Ireland, examined attitudes to home insurance, including levels of cover, rebuild cost awareness and how people are responding to wider cost pressures. The research forms part of Aviva’s ongoing efforts to support customers in understanding underinsurance and the importance of maintaining appropriate levels of cover.
Insurance costs are influenced by a range of factors, including broader trends such as increases in claims, repair costs and inflation, as well as individual circumstances.
Underinsurance remains a widespread issue in Ireland, with Aviva data indicating that over 17% of home insurance claims involve some level of underinsurance. At the same time, Aviva has seen total claims payments increase by 24% in 2025. Together, these trends highlight the importance of ensuring your cover reflects the true value of your home and belongings.
While insurers may apply automatic increases in cover to reflect general cost trends, these are broad estimates and may not fully reflect individual homes or changes such as renovations or upgrades.
Underinsurance occurs when your home or its contents are insured for less than it would cost to fully rebuild or replace them. If this happens, claim payments may be reduced, even for partial losses. This happens because of the ‘average clause’, a standard feature of most home insurance policies, which reduces claim settlements proportionately where underinsurance occurs.
Understanding rebuild costs
The Aviva research suggests many people are unsure how to set the right level of cover:
- Only 17% say they know their rebuild cost accurately
- 52% rely on rough estimates
- 26% do not know it at all
The rebuild cost is the amount it would take to completely rebuild a home from scratch, including materials, labour and other associated costs. It is different from the market value and is a key factor in setting the appropriate level of buildings cover.
Households reviewing cover
Households are continuing to review their spending and financial commitments. Over a third (39%) have made changes to their cover or excess in the past year.
Rebuilding costs also continue to rise, alongside broader increases in construction and repair costs, with the Society of Chartered Surveyors Ireland (SCSI) reporting a 7% rise in the year to the end of 2025**.
Contents cover: where people need support
Almost half (49%) of respondents say they have experienced challenges when estimating the value of their contents.
This reflects how difficult it can be to calculate the full value of everything in a home — from furniture and appliances to personal belongings built up over time.
Aviva suggests a room-by-room approach when estimating the value of contents, alongside reviewing cover regularly. Having the right level of contents cover can help ensure that items can be replaced if something goes wrong.
Underinsurance is more common than many people realise, and the financial impact can come as a shock at claim stage. If a home is insured for less than its rebuild cost, any claim payment may be reduced by the same proportion. At Aviva, we automatically adjust buildings cover at renewal in line with general cost trends to help customers stay protected. However, these adjustments are based on general estimates, and every home is different, so it’s important that customers review their cover regularly, particularly after renovations or home improvements, to make sure it reflects their property. Taking a few simple steps to check your cover can make a significant difference if you ever need to claim.
Gillian Devereux, Senior Loss Adjuster at Aviva Insurance Ireland DAC, said:
How to reduce the risk of underinsurance
Aviva advises people to:
- Use the SCSI Rebuild Cost Calculator as a starting point to estimate the rebuild cost of your home (this is based on typical estate homes, so costs may be higher for older or more unique properties)
- Factor in any extensions, renovations or unique features
- Check and update your sums insured to match the rebuild cost
- Review your cover regularly, especially after making changes to your home
- Speak to a broker or financial adviser if unsure about the level of cover you need
ENDS
*according to research of 1,000 adults by 3Gem Research & Insights, 2026
**according to the SCSI House Rebuilding Cost Guide 2025, summarised here