It has been a tough recession for the insurance companies. Not only did they see the value of their investments take a serious whipping when the stock and property markets went into free fall, they are also faced with the prospect of increasingly claim-happy customers and falling business. So, it's no surprise that they are exercising tighter control in one of the few areas where they can have a direct impact independent of market forces – claims.

Insurance brokers are reporting a much tougher attitude being applied by the insurance companies when dealing with claims compared to just 12 months ago. A much stricter climate exists where terms and conditions are rigorously adhered to, as insurers work to reduce costs by taking full advantage of the fine print. David Beckham might have insured his body for €110 million but if he was dealing with an Irish insurer, he could expect a thorough inspection before he could start splashing out on more tattoos.

Brian McNelis, director of financial services with the Irish Brokers Association, says there has been a noticeable difference in the way insurance companies are approaching claims over the past 12 months.

"They are applying to the letter of the law, the terms and conditions of policies, in relation to the majority of claims unless they are of a very simple nature. For most claims whether they be motor, accident or domestic damage or theft, anything like that they will appoint an adjuster – which they are quite entitled to do. However, they are appointing them much more often than they have in the past. They seem to be concerned that they settle claims on a very strict basis," says McNelis.

Or as another broker bluntly puts it, insurance companies are trying to cut costs across the board as they wave goodbye to the boom-time profits they enjoyed and they are working very hard to ensure that they don't have to pay out at all: "All insurers are looking at claims more closely with a view to reducing outlays. In this respect a more hard line approach is being adopted, down to examining the minutiae of policy clauses with a view to reducing liability or avoiding it altogether," he says.

Of course, the insurance companies are perfectly within their rights to stick rigidly to the terms and conditions. There is nothing illegal about rigorously testing a claim before paying out. Equally, the appointment of an adjuster does not mean that the insurance company thinks there is something dodgy going on with your claim. It does mean, however, that the processing of your claim is going to be far slower than you might expect and the outcome might not necessarily be what you were expecting.

For instance, it is becoming much more common for insurance companies to opt to replace your damaged or stolen goods themselves rather than pay out on your policy. This is perfectly acceptable within the terms of your policy and it benefits the insurer because they can negotiate bulk deals with suppliers thus reducing the cost of the claim. They are also less inclined to make full payouts for repairs until the work is done and verified – they will hold back a portion of the payout until this can be checked.

This new, tougher environment does mean that consumers need to be very vigilant when taking out insurance. The internet era has heralded an age where we end up agreeing to abide by the terms and conditions of something on an almost daily basis without giving due consideration to what that actually means or, indeed, reading them in the first place. It's one thing to agree to the small print when logging on to an internet forum, quite another when you are signing up for insurance. Read the fine print very carefully and if there is something that does not sit well with you, question it or look for another insurer.

This does not mean that you shouldn't be on the look-out for the best deal available to you. It still pays to shop around whether through price comparison websites, by calling the insurers personally or by using an insurance broker, but make sure that you are clear on exactly what you are covered for and that this is adequate to meet the cost of replacing your possessions.

There's no point in saving money by taking out house contents insurance for €12,000, for instance, when your home entertainment system cost you the guts of that in the first place.

It's also important that you don't attempt to chance your arm when you are taking out insurance in the first place. It might be tempting if you are trying to bring costs down but leaving out crucial details can come back to haunt you when a claim is submitted. The National Consumer Agency advises people to be scrupulously honest when dealing with insurers to offset any problems further down the road.

"Disclose anything that may be relevant. If you withhold relevant information, your policy may be invalid and your insurer may be entitled to refuse a subsequent claim. If in doubt about anything, always disclose it. Never try to reduce your premium by keeping relevant information from your broker or insurance company. An insurance policy involves a contract and you have obligations under that contract, just as your insurer does. Any material omissions or misstatements on which basis the contract was established may render it void, in whole or in part," they advise.

If you have been entirely honest and your claim is fair yet your insurance company is still refusing to pay out, remember that contracts are a two way street. They are obliged to abide by them as well and you can appeal their decision if you feel that you have been unfairly treated. If your claim is particularly complicated you might consider appointing an independent loss assessor to act on your behalf – they can submit the claim and deal with the insurance company directly or alternatively, you can appoint an assessor to appeal the decision. You should also factor in the cost of hiring an assessor, normally 10% of the payout plus VAT, which is not covered by your settlement. Alternatively, you can make a complaint to the Financial Ombudsman.