Buildings Insurance cost cutter

gavmcc

When buying buildings insurance, all companies trick you into buying:j a policy based on the total market value of the property. (Just think how much this has risen in recent years.)

What they never point out, in order to maximise their profits, is that you should really be paying to cover the re-building cost. The garden/land that the house sits in represents a large proportion of the current house/property value. And it simply doesn't cost as much as the total sale price to knock it down and start again.

If you can actually establish the bricks and mortar cost, you will save a fortune. (Get a survey done)

Insurance companies make billions from this.

easynotec3

gavmcc wrote:

When buying buildings insurance, all companies trick you into buying:j a policy based on the total market value of the property. (Just think how much this has risen in recent years.)

What they never point out, in order to maximise their profits, is that you should really be paying to cover the re-building cost. The garden/land that the house sits in represents a large proportion of the current house/property value. And it simply doesn't cost as much as the total sale price to knock it down and start again.

I have to disagree with this.

I work for in a brokerage and we ALWAYS explain to our clients that it is the rebuilding cost and not the market value that they insure for.

I have lost count of the number of telephone conversations were the clients says "Well we're buying it for £x". If somebody is not sure we recommend that they check/get a survey done. Where the client is unable/unwilling to do this (due to cost or whatever), then we refer them to the buildings calculator on the ABI website - https://www.abi.org.uk

Astaroth

Have to say that I have also always been asked the rebuild cost and not market value too.... on the number of people asking how to find the rebuild cost on this forum I dont think I am the only one.

gazza975526570

I agree with the last poster.

After having worked in insurance for over 10 years i would say it is the customers who believe it is the value of the property and every insurer i know would either volunteer the information that it is the rebuild or when asked would state likewise.

After any survey on a purchased property you should be given the market value and rebuild cost. It is the latter you use for insurance purposes

Pantera_Fan

I have to agree with all the replies to this. As a household underwriter I have this discussion many times a day and we always insist in the client obtaining the correct rebuilding cost as that is the maximum amount we would pay in the event of a total loss, so why insure for more?

After all, you don't insure your Ford Fiesta as an Porsche 911 so why insure your 3 bedroom semi as a 6 bedroom mansion?!?