Building insurance - it will not cost a MILLION to rebuild my house...

[Deleted User]

... why do all the major companies, LLoyds, Nat West, Prudential, Direct Line - to name a few- insist on quoting me for this huge amount and not allowing me to reduce it?

Having done quiote a bit of research my home would cost no more than £150,000 to rebuild - and that includes the detached garage!

*Scarlett

Many companies now give a "blanket" cover on buildings and this will not be to your detriment unless you can find suitable cheaper cover for £150,000 rebuild cost.

There are possibly other benefits in this amount for alternative accomodation, ground clearance, architect's fees etc.

The price of your policy will be calculated on your personal details and the property details and you are insured for the maximum rebuild cost of the home "UP TO" £1,000,000.

So you will not get £1,000,000 unless it costs that to rebuild your home.

Most insurers will be able to calculate the risk so that a home actually costing anywhere close to £1,000,000 will be excluded from their standard quotes or will have a much higher premium.

It's maybe a marketing tool but at least you won't be underinsured.

If you don't like this form of insurance there are many insurers who will cover your buildings for a sum that you specify.

Hope this helps.

[Deleted User]

I take on board what you say Scarlett but to insure my home for one million pounds (or even £500k) is grossly OTT. Customers still have to pay for that unnecessary cover - and even if I lumped on another £100k - a million would still be excessive. The big companies are not allowing customers to reduce this amount and thus their premiums.

Companies are also lumping in other unnessecary but compulsory 'freebies' that are not free (you get nothing for free from an insurance company - ever!), but are included in the premium and there is no option to opt out and thus reduce the premium. Free key care? I already have that in my motor insurance (and yes it covers all my house keys as well) - so I don't want it again. I don't want £25 worth of M&S vouchers - I want £25 less on my premium.

I don't want unimited cover on my contents - and so on.

It's hardly moneysaving if customers are simply given blanket coverage by all the main players, coverage to amounts they don't want or need.

I'm still shopping around for my next home insurance policy but I'm shocked at the costs - especially costs which would be charging me for coverage I don't need.

*Scarlett

Well you need to search all the policies that are suitable for your needs.

You can probably find find a buildings and contents policy that will cover for what you want.

There are many companies that will allow you to reduce the sum insured or increase your excess. But don't ever under-insure your interests.

If you see a quote that you like on-line but it does not meet your specific requirements, give them a ring. There might be other options that are not available on-line.

Maybe try a local broker if you are concerned that you are being over charged. Generally this would not be the case for a blanket cover.

huckster

Yet another person who does not understand blanket cover.

You are not being charged a premium based on 'up to £1 million cover'.

In fact you are only being charged a premium based on the approximate rebuilding cost of your house.

When you provide them with details of your property, they do a rough calculation using RICS rebuilding costs of what your house would cost to rebuild. This is what they call a 'notional amount'. They base the premium on this 'notional amount' which might be roughly the £150k rebuild cost you are on about. So you are paying a premium on a rebuild cost of (say) £150k and getting cover of up to £1 million.

The whole reason Insurers have moved in this direction, is that people were complaining about Insurers not being able to help them calculate rebuilding cost to base their sums Insured on. Customers were opting out of choice to go for blanket cover policies instead, as the premiums were often very competitive, with added peace of mind, that the sums Insured were likely to be adequate.

It is up to you, but don't come back complaining if you choose a £150k sum Insured policy, pay the same premium, then have a claim and find out that due to the sum Insured not being adequate you are being penalised. Yes the Insurers could reduce your claims settlement if they found your sum Insured was not adequate.

[Deleted User]

Quote from Huckster

You are not being charged a premium based on 'up to £1 million cover'.

Well I'm no expert on insurance but to give an example, take a look at Nat West's home insurance.

Standard cover (they also do Elite) -

"The Standard policy automatically provides cover for up to £1,000,000 for the cost of rebuilding your home and any outbuildings."

There is no option for the customer to reduce this amount to a more realistic figure and thus reduce the premium.

vaio

you are missing the point, the idea as I see it is that the blanket cover of £1m stops people having to guess how much their three bed semi in Birmingham would cost to rebuild (with all the attendant grief that getting it wrong would cause in the event of a claim).

The premium you pay will be based on what an average three bed in your postcode would cost to rebuild, not £1m.