Home insurance rebuild price

QueenMop

I'm currently trying to get home insurance on my two bed mid terraced house.

In the questions it asks for the estimated rebuild cost, I did an online calculation and it came back at £106,000.

The thing is the house only cost £17k! If it fell down, I wouldn't want to be spending anywhere near that amount to rebuild it as it simply isn't worth it.

But putting my rebuild cost in at £106k makes my insurance ridiculously expensive.

Does anyone know if there is a way around this, and what would happen if I put in a lower rebuild cost?

Thanks for any help

QueenMop

Oops, I'm sorry, I realise this is in the worng forum now.

maninthestreet

£17K - where is this property??

QueenMop

County Durham - in an old mining village.

kingstreet

The rebuild cost includes an allowance for professional fees and site clearance. What you paid for a property, what it's worth and the rebuilding cost are totally unrelated.

The rebuilding cost is calculated from the floor area, multiplied by the number of storeys and then multiplied by a factor based on the age and location of the property.

I've just done a valuation for an end-terrace nearby which came in at 102m2 and a rebuilding cost of £104,000.

You really need to insure the property for its full rebuilding cost. Even if you don't rebuild this one in the event of a total loss, what would you need to replace it?

lincroft1710

Any rebuild would have to be to current building regs which means loads of insulation, double glazing, all new electrics etc, and would cost way over £17K. For an insurance rebuilding cost you have to factor in architect's fees, planning and building regs approval fees plus site clearance, which altogether could easily be £5K.

QueenMop

Thanks for the replies - I've put the full rebuild value on the form now. I suppose the extra cost is worth the peace of mind.

G_M

It depends what you want in the event of the worst hapenning.

Say the house burns down.

If you're fully insured, the insurer pays the site clearance bods, architect, the builders, the council inspectors etc and you get a brand new, modern house.

If you're under insured, the insurer half-builds the house, and you pay (say) £50,000 from your savings to build the other half.

If you have NO insurance, you could just sell the burnt-out site (for £500?) at auction and walk away. But you'll have saved yourself the insurance premiums.

It's really your choice (unless you have a mortgage in which case the lender will INSIST you fully insure).