Buildings and Contents insurance questions

Layo909

1. We bought a house 3 years ago and took out home insurance. We are now looking for a cheaper home insurance policy. Do we still count as first time buyers?

2. What exactly is meant by 'good state of repair'? The house needs a few things doing but isn't exactly falling to pieces.

3. Rebuild cost - the BCIS have given it as £93,000 (as per GoCompare) and the property check company have given it as £144,000. Which one is correct/which one do we use?

dacouch

1) No your not a FTB, however that should normally make your insurance cheaper as you will have a history which Insurers prefer.

2) It means it is in a reasonable state of repair eg storm proof etc etc and there are no obvious issues that if not fixed in a reasonable amount of time could increase the chances of a claim.

3) When you say property check, do you mean a company telling you the market value of the house. The amount you should insure it for is the rebuild cost and not the market value, if you look on your mortgage co's valuation it will state the rebuild cost / reinstatement cost from the date they performed the valuation. You need to index link this for the last three years.

Note it is best to over insure the property, so if you have £93k I would round up to £100k, it's worth noting that it can often be cheaper to select £100k over an amount just below it eg £93k as a lot of Insurers have a discount that kicks in at £100k (and often £200k / £300k etc) as they know the chances of a total loss claim are relatively small so offer a bulk purchase discount if you like.

NiceDay42

Agree with dacouch, underinsurance is a massive issue, and dangerous if miscalculated. If you understate the cost to rebuild your property and the worst happens (and your property needs to be rebuilt), the insurance company will only indemnify you for the cost to rebuild your home, to the figure you stated. If the cost is higher, you have to foot that bill, which can be thousands, if not tens of thousands of pounds, depending on how much you understated your rebuild costs by.

innocentman

You should insure the property for the rebuilding costs, best way is to use the original amount on your survey and add at least 5% per year to that. Insurers wont worry if your over insured!

If you have the sqF or Sqm of the property use the calculator on the ABI website that should be correct

Don't just go to the internet based serach engines as there are better deals in the Broker markets, plus a broker will help you check your rebuilding costs.

Try hardtoplaceinsurance they helped me

bambammy

BICS ( gocompare ) quoted £126'000 on my renewal insurance quote, yet my Home Report states £165'000

bingbong1978

bambammy wrote: »

BICS ( gocompare ) quoted £126'000 on my renewal insurance quote, yet my Home Report states £165'000

I would go with the Home Report as this will have been done by a surveyor but make sure this is the re-build valuation and not market value.

dacouch

NiceDay42 wrote: »

Agree with dacouch, underinsurance is a massive issue, and dangerous if miscalculated. If you understate the cost to rebuild your property and the worst happens (and your property needs to be rebuilt), the insurance company will only indemnify you for the cost to rebuild your home, to the figure you stated. If the cost is higher, you have to foot that bill, which can be thousands, if not tens of thousands of pounds, depending on how much you understated your rebuild costs by.

It's worse than that, if you are under insured, the Insurer will not pay out upto what you have covered yourself for. They will actually deduct the percentage you are under insured by from your entire claim.

bingbong1978

dacouch wrote: »

It's worse than that, if you are under insured, the Insurer will not pay out upto what you have covered yourself for. They will actually deduct the percentage you are under insured by from your entire claim.

Not always. You can have a situation when the amount after applying average is more than the sum insured and they will then cap the payment at the sum insured.