We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Hopefully an easy question...
david89999
Posts: 49 Forumite
...for the assorted experts on here.
House buildings insurance:- we brought a new build house, took all advice from an FA recommended by the company etc. The house cost £210,000 to buy, the Mortgage valuation for reinstatement of the house (I am assuming this means rebuild) says £141,000.
Our FA got us buildings inurance with a rebuild valuation of £400,000.
As the first year is now up, I am looking around to see if I can beat the current quote of £550 (includes contents).
On the usual multi search websites, it's asking for the cost to rebuild, offers various calculators etc to do this, so on entering the suggested figure the cost of inusrance comes down massively, as you can imagine.
Questions:
1. Was I stitched up by the original FA?
2. Is £141,000 the right amount to put in, or do I have to take into account the cost of repaying the mortgage? For example, if the worst happens, do I have to rebuild my house and pay off the mortgage? Or does that continue with the rebuilt house?
Essentially I am trying to make sure I don't under insure myself, and get some sort of explanation as to why I have been paying such a huge buildings insurance cost for the past year.
Many thanks for your help.
House buildings insurance:- we brought a new build house, took all advice from an FA recommended by the company etc. The house cost £210,000 to buy, the Mortgage valuation for reinstatement of the house (I am assuming this means rebuild) says £141,000.
Our FA got us buildings inurance with a rebuild valuation of £400,000.
As the first year is now up, I am looking around to see if I can beat the current quote of £550 (includes contents).
On the usual multi search websites, it's asking for the cost to rebuild, offers various calculators etc to do this, so on entering the suggested figure the cost of inusrance comes down massively, as you can imagine.
Questions:
1. Was I stitched up by the original FA?
2. Is £141,000 the right amount to put in, or do I have to take into account the cost of repaying the mortgage? For example, if the worst happens, do I have to rebuild my house and pay off the mortgage? Or does that continue with the rebuilt house?
Essentially I am trying to make sure I don't under insure myself, and get some sort of explanation as to why I have been paying such a huge buildings insurance cost for the past year.
Many thanks for your help.
Some people are like a slinky. Not much use for anything, but they bring a smile to your face when you push them down the stairs.
0
Comments
-
The cost to rebuild your house bears no relationship to the cost to buy - don't forget the land is already there. As I remember, the cost to rebuild ours is far less than we paid for the house.
Your premium does seem expensive, daughter had the same problem she took the insurance, buildings, contents and life that the financial advisor recommended, but at the end of the first year replaced everything at less than half the price.
About the mortgage I'm not sure to be honest - it's never happened to us or to anyone we know. I would imagine the mortgage continues and has to be paid as normal. But someone on here probably does know the answer.0 -
I am not an expert in this area, but I recall from my own shopping around, that some insurance companies don't ask you for the rebuild cost but just have a maximum figure that they pay which is common to all policies issued by them. Perhaps your original insurer was one of these companies?
the poster formerly known as
terryw"If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools"
Extract from "If" by Rudyard Kipling0 -
I got a very competative quote from AA insurance, for my buildings insurance its unlimited and the cost is £135 per year, i also got my contents with them and pay almost half the amount i was paying with my previous insurers.0
-
Yes the £141k was the re-building cost for last year - don't forget to increase it to allow for inflation.
(actually it should be the house rebuilding cost index or something, but it's about 5-10%)
Ignore the cost of the current mortgage. If the property needs to be repaired or rebuilt then the insurance company will pay for that and the mortgage will not be affected."Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
Try a price comparrison siteOwing on CC £00.00 :j
It's like shooting nerds in a barrel0 -
Yes the £141k was the re-building cost for last year - don't forget to increase it to allow for inflation. (actually it should be the house rebuilding cost index or something, but it's about 5-10%)
Ignore the cost of the current mortgage. If the property needs to be repaired or rebuilt then the insurance company will pay for that and the mortgage will not be affected.
Thanks for your answer, I needed some reassurance regarding the status of the mortgage. It appears I was sold a pup by the FA. :mad: Never mind, once bitten...Some people are like a slinky. Not much use for anything, but they bring a smile to your face when you push them down the stairs.0 -
A lot of insurance companies offer cover up to say £400K or unlimited cover because they rarely get people claiming for the complete loss of the house. I don't think that factor in itself makes the cover more expensive. When they do get a claim for a total loss and its say an old person who forgot to increase his/her cover they can refuse to pay the full amount on the basis that the insurance wasn't for enough and they would be within their rights to do so. They get so much grief (and adverse publicity) from the old person's family about this kind of thing that it is simpler to offer the higher level of cover because they know they are rarely going to have to pay out to that level.
The premiums would not necessarily be higher for that kind of cover, it will depend on the company and also on OP's postcode. Some areas are very prone to burglaries so contents cover is expensive.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.3K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.4K Spending & Discounts
- 247.2K Work, Benefits & Business
- 603.9K Mortgages, Homes & Bills
- 178.4K Life & Family
- 261.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards