Buildings cover - how do you work out value of re-build?

wildballoonlady

I want to start from scratch assessing amount of insurance needed for both building and contents. How do you work out realistically the right cover needed to build from scratch. With contents how can you get the right cover without paying over the odds. In a 4 bed home with usual fixtures and fittings what would be a good amount? Thanks

dacouch

When did you last remortgage? As the valuation has a rebuild sum insured on it, if you have this it can be index linked

wildballoonlady

We changed mortgage companies last year, so do I assume I need to dig out the paper work to find the rebuild sum? Is there a web site for the index linked? any thoughts on contents - thanks so much...

dacouch

If you look at the valuers report there will be a part thats says something to the effect of "Minimum reinstatement costs" or "Rebuild Value". They normally over estimate to cover themselves.

I beleive the inflation on builders costs was 5% ish last year so if you add about 7% it should be ok. The inflation is worked out by https://www.rics.org. or you may find this link helpful http://abi.bcis.co.uk/

wildballoonlady

thanks dacouch vbmenu_register("postmenu_19344781", true); - I've learnt so much from this site in the last two days. It's very empowering to finally know how stuff works.

My present home insurance (Direct Line) has re Buildings, sum insured £1,000,000. This is a 4 bed town house terraced - I'd be interested to know if that is overly excessive or not! Contents is £28,500.

mattymoo

The DL policy is sold with a high building SI so that it will cover 95% of the properties in the UK and policyholders do not risk being underinsured. DL will know the vast majority of their customers have rebuild values in the £100k to £200k range. It does not mean that you are paying 5-10 x the true cost.

Other insurers ask you to specify the SI and this is where the links / info Dacouch has provided come into play. This is the more traditional way of doing it and having a valuation report less than 2 yrs old will be a big assistance providing it shows the ERBC.

dacouch

Your home would be about £160000 ish to rebuild assuming its not unusual construction etc (You only insure for the rebuild value not the market value as the land is already yours).#

As with most Direct Line contents customers you are under insured on your contents, for an average home you should be looking at more like £40000 or more for contents.

It is important that you insure for the full amount of your building and contents as otherwise the Insurers reduce any claims payments by the percentage you have underinsured by so if you actually have £40000 of contents a clim under contents could be reduced by around 25%....

You need to insure for the full replacement cost of your contents at the new costs

wildballoonlady

If I use comparison sites should I type in the valuation report figure if was made 1 -2 years ago? And would I type in £40,000 for contents? Is there a link for advice on contents? Thanks ...

dacouch

Read this http://www.mortgageintroducer.com/ccstory/232623/263/Average_contents_insurance_policy_is_inadequate.htm

mattymoo

A household inventory form like this one - http://www.osborneandsons.co.uk/pdfs/Household%20Contents%20Schedule.pdf will help you to work out the true "replacement" value of your contents. There are others, I googled "household contents inventory" to get this.

dacouch

http://www.abi.org.uk/Document_Vault/Is_Your_Home_Under_Insured_-_Leaflet3b1.pdf

http://www.moneymadeclear.fsa.gov.uk/products/insurance/insurance_getting_help.html

http://www.moneymadeclear.fsa.gov.uk/products/insurance/types/possessions/buildings_insurance.html

http://www.moneymadeclear.fsa.gov.uk/products/insurance/types/possessions/contents_insurance.html

This will help you calculate how much contents you actually have...

http://www.directline.com/home/calculator.htm (The irony using a guide from Direct Line to find you are under insured and were alledgedly probably advised by their staff or wesbite to pick the low sum insured in the first place)

If you need help post on here or I personally would recommend speaking to a local broker who you will find helpful.

When shopping around on the internet watch the websites as they quote with a Voluntary Excess and a Compulsory Excess which often affed up to around £150. So click on the button to find the total excess of read the small print to find what the compulsory excess is and then add that to the voluntary excess.

I personally would not recommend you take the security discount (This happens when you put in you have certain door and window locks) as the discount on a premium of around £200 would be circa £6 but you would then have a warranty saying either you are not covered when you go out if you do not use the locks or the excess is increased massively.

Post up here what companies you get quotes from and we will advise you what they are like