problems changing house insurance

dan2002

hi all I seem to be having big problems trying to change my house insurance from my mortgage company to another insurance company so any help please ,The thing is my mortgage company want to charge me £650 for building only and for £120000 cover ,I do have the certificate to prove this as they have sent it (cover was to start 15/01/10 and I phoned them 04/01/10 to cancel ) so I checked and found another company doing £145000 + contents cover for £260 so have went with them.Thing is I have now recevied my letter from the mortgage company telling what they need from me to cancel their policy, now this is were my problem is ,they now tell me they want my building to be insurance to be £175000 yes thats over £50000 more than they HAVE insured my house for and my new insurance company havent heard of that sort of an increase for just changing companys.Thing is they are also looking £25 adim fee and my new company will increase my building to the £175000 but at a cost to me and they are telling me I dont need that cover what do I do

*MF*

Hi ...

Use this link:

http://www.bcis.co.uk/site/scripts/documents_info.aspx?categoryID=2&documentID=7

It is a reasonably well recognised way of establishing what you should insure your house for - and you can use this as a basis for disputing what the mortgage company are suggesting, assuming that the figures the link produces does confirm there are differences.

Afaik - some mortgage companies do (and are allowed to) charge a fee for admin, and you may have to pay that.

Hope this helps ...

dunstonh

they now tell me they want my building to be insurance to be £175000 yes thats over £50000 more than they HAVE insured my house for and my new insurance company havent heard of that sort of an increase for just changing companys.

The lender can insist on a sum insured. Often the figure used is the original valuation with its rebuild figure in there then indexed accordingly. The indexation can sometimes throw up some weird figures.

Thing is they are also looking £25 adim fee

Some lenders still charge this. Not many nowadays but they are allowed to.

A premium difference of £650 to £260 seems rather large for like for like. The lender is likely to be more expensive but it would be unusual to be that much more expensive.

Also, the lender's policy may state an indicated sum insured but may have blanket cover upto a certain amount (typically £500k or thereabouts). in fact, this is how most standard household policies are done nowadays. Is there any reason why you are still using the older way of doing it by specifying the sum insured? Is the house non standard in some way that requires you to do it like that?

dan2002

thanks for the info have checked BCIS and there rebuilding costs is coming in at around £122000 and that is allowing for a lot more space than we have so going to phone my mortgage company tomorrow with the info I have and ask how they can come up with a value £50000 more than its going to cost

dan2002

dunstonh I have just the normal terr house and yes the £650 sum is way over the up ,when I went to price around they all laughed at the price so I know I am being ripped off and went with AXA direct for both buildings and contents remember the £650 was only buildings "no contents"

dan2002

hi all just a bit of an up date,phoned today and now they are saying "oh we had under valued" your house and the sum should be £165000 and we have just discovered this mistake, I then asked if this is the case then whos fault would it be if my house was destoryed in the morning and I had not got the right amount of cover (I dont ask for the building cost they tell me what they want covered) whos fault would that be ,they couldnt give me an answer but have told me if I am not happy write a letter of complaint to there head office which I will be doing

jonesMUFCforever

Why not just go for a company that offers unlimited cover?
A lot of them do it this way now so you cannot be underinsured - they will use the type of house number of bedrooms postcode and claims history to work out a premium for you.

dunstonh

I then asked if this is the case then whos fault would it be if my house was destoryed in the morning and I had not got the right amount of cover (I dont ask for the building cost they tell me what they want covered) whos fault would that be ,they couldnt give me an answer but have told me if I am not happy write a letter of complaint to there head office which I will be doing

When I worked for a bank years ago, if you used the bank home insurance product and the initial sum insured matched the valuation, the bank would pay any difference if there was a shortfall in the event of a total loss.