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New figures recently released by the Society of Chartered Surveyors have shown that the cost of rebuilding properties has dropped dramatically leading to warnings to homeowners that they could be paying too much for their home insurance cover.

The report reveals that the average cost of rebuilding a house in Ireland has plummeted by almost 8 per cent. This comes on the back of a fall of 5 per cent during the previous year, which makes for a collective reduction of 13 per cent in the cost of rebuilding a property.

Despite this decrease, homeowners have seen house insurance premiums rise by 14 per cent in the past year, according to the Financial Regulator, who has urged households to shop around for the best deals. The premium for house cover is based on the cost of rebuilding the property if it is somehow destroyed or burnt down in a fire. This rebuilding cost does not reflect the market value of the house if it was to be put up for sale.

The icy conditions and flooding over the winter are also expected to push premiums up following an estimated €500 million worth of damage.

The Society of Chartered Surveyors thinks that premiums should reflect the lower costs of rebuilding for homeowners. A spokesperson said, "This is very good news for homeowners. We would urge them to go to our website www.scs.ie, before they renew their house insurance or if they want to check that they are paying the appropriate premium. Given the current economic climate, everyone is shopping around and looking at ways of cutting down costs. By carrying out this straightforward calculation, people could end up making considerable savings."

Property owners in Dublin saw the largest fall in rebuilding costs, with a drop of 9 per cent, with the cost of rebuilding in the city decreasing since last year by about €186 per square metre. The cost of rebuilding a four-bedroom 118 square metre detached house with a garage and top of the range kitchen fell from €257,669 to €235,668.

The estimated fall in rebuilding costs reflected averages across the State, but if the costs had been underestimated, then people will only be able to claim up to the value for which they have insured the property for in the event of damage to the property through fire or an disastrous event.