Rebuild costs - a matter of opinion?

SusanSheppard

I have recently had some water damage to my property, and am horrified to find that the sum I insured the building for - according to the last valuation done on my property - is classed as under insured by the Loss Adjuster. Their explanation is that the surveyor used a lower price per square metre (or whatever it is they use) than the Loss Adjuster thinks. I insured according to a valuation plus the index linking applied by my previous insurer when I changed to my present insurer, and now find I am classed as under insured. So is it all a matter of opinion? The rebuild costs stated by the Loss Adjuster are 38% higher than the figure previously insured. I have now increased the sum assured, but wonder if anyone can be certain they are adequately insured if it is all a matter of opinion. Another thing that has crossed my mind is that the loss adjusters have said this to try to invalidate or limit the claim.

lisyloo

How long ago was the survey?
If it as a long time it's possible the index-linking done by your previous insurer that you relied on is not accurate.

mattymoo

Many loss adjusters are not formally qualified to provide building valuations. Your valuer would have been ARICS or FRICS (associate / fellow of Royal Institute of Chartered Surveyors) on the other hand.

As lisyloo says, providing the valuation was recent (5-7 yrs max) it is unlikely the index linking can have gone so far out of kilter to give the 38% difference. I'd argue that your qualified surveyor trumps their adjusters opinion.

* Some adjusters do hold a suitable qualification so it might be worth just asking first.

SusanSheppard

The valuation was done almost 7 years ago, index linking is not out of kilter. The Loss adjuster and surveyor disagree on the rebuild cost per square metre. The current valuation uses a lower value per sq m. the Loss Adjuster and uses a higher figure, which accounts for the difference in valuations almost exactly.
I am just worried that the insurers will use the loss adjusters figures to cut the claim as the
Loss Adjusters are saying I am under insured. I know they are employed to try to minimise the claim as far as possible, but wonder if they are using unjust means to do so.

mattymoo

From memory the RICS tables are open to a bit of interpretation in terms of quality of building and type. There are guidance notes like this:-
Basic kitchen - 3-4 units, single sink, plumbing for wash machine and space for fridge.
Medium - 5-6 units, space for dishwasher, double drainer sink.
High - waste disposal, built in appliances, concealed lighting etc.

In other words, visual cues as to which band to place the property in.

You could misinterpret if someone had a basic / mid range property but had just splashed out on a luxury kitchen. You lump the hole house into the luxury bracket when you should just go for basic and add on say £6-10k for the luxury kitchen.

As I said earlier, check the adjusters qualifications and then see if they match up to your valuation provider. I suspect they will not.

dacouch

It could be caused by you making improvements to the building which the original valuation / survey would not have taken into account. Have you had a conservatory fitted, new kitchen, new bathroom, fitted bedroom, new hard flooring, new alarm, new windows etc. Any of these will have increased the amount of building cover required.

I would agree with Matty that the qualified RICS surveyor is more likely to be correct and they normally factor in a margin of error to protect them from being sued.

If the surveyor has made a professional mistake there is alway the option of sueing him for any shortfall in your claim payment.

If you are under insured the Insurers will deduct the percentage you have under insured by from your claims payment. Some Insurers will allow a certain percentage of under insurance before they apply the deduction and some will give you the option to pay the difference in premium and not deduct from the claim payment.

mattymoo

Have you had a look at the BCIS calculator?
http://calculator.bcis.co.uk/index.cfm#usingcalculator
I've linked to the guidance page to get you started.

lisyloo

If the surveyor has made a professional mistake there is alway the option of sueing him for any shortfall in your claim payment.

Doesn't that depend?
If this was a survey instructed by Susan then I agree.
However if the "last" valuation done was for a remortgage and Susan has just a copy then it was the lender that instructed the surveyor and Susan cannot sue them as she has no contract with the surveyor.

From what is written so far it sounds to me like an attempt to refute the claim.
Even if the survey is just a copy it's still from someone higher qualified and therefore the insurer should be challenged.

mattymoo

lisyloo wrote: »

Even if the survey is just a copy it's still from someone higher qualified and therefore the insurer should be challenged.

Indeed - there is nothing to stop you approaching your original surveyor and asking for their views on the adjusters comments and seeing if they will back this up with a letter.

You may have to pay up front but the insurer should reimburse if your surveyors opinion is accepted.

dacouch

lisyloo wrote: »

Doesn't that depend?
If this was a survey instructed by Susan then I agree.
However if the "last" valuation done was for a remortgage and Susan has just a copy then it was the lender that instructed the surveyor and Susan cannot sue them as she has no contract with the surveyor.

From what is written so far it sounds to me like an attempt to refute the claim.
Even if the survey is just a copy it's still from someone higher qualified and therefore the insurer should be challenged.

I would have thought they would have come back on the surveyor or possibly the mortgage provider as the surveyor advises or a minimum rebuild figure and the mortgage company insist the client uses this for their Insurance. If the surveyor makes a mistake in their professional duty then there is a good chance they will be liable. (Their professional indemnity Insurance is very expensive for a reason)

lisyloo

I would have thought they would have come back on the surveyor or possibly the mortgage provider as the surveyor advises or a minimum rebuild figure and the mortgage company insist the client uses this for their Insurance.

I can see your logic but the mortgage provider is covering THIER interest and is not obliged to provide information to cover the householders interest.

If the surveyor makes a mistake in their professional duty then there is a good chance they will be liable.

I agree, but if this was a re-mortgage valutaion then the surveyors liability and professional duty are owed towards the lender and not the householder. Woudl of course be different if Susan directly instructed and paid the surveyor when the liability would be different.
Obviously this would need confirmation from a solicitor.

This is all theorectical anyway.
The best course of action would be a formal complaint followed (if necessary) by a complaint to the ombudsman. This is free and has no risk, so would be the first course of action before taking legal action.