Cost to rebuild my house?

alarmed

I'm searching around for cheaper building & contents insurance online and keep getting asked about the cost of rebuilding my house should the worst happen.
Apparently it's not the same as a market valuation and I have not had any recent surveys done.
How would I be able to guage this amount to obtain an accurate quote please?

Thanks as usual

bizzybee

Had to do this on Friday and used this website

https://www.abi.org.uk/Insurance-and-savings/Products/Home-insurance/Buildings-insurance/Calculating-your-rebuild-cost

alarmed

bizzybee wrote: »

Had to do this on Friday and used this website

https://www.abi.org.uk/Insurance-and-savings/Products/Home-insurance/Buildings-insurance/Calculating-your-rebuild-cost

That's brilliant thanks

dacouch

The calculators normally don't take into account fitted kitchens / bathrooms, double glazing etc etc so add a hefty chunk on and then add 10% for safety

kingstreet

If in doubt about rebuild cost, there are plenty of "bedroom rated" plans which use a flat amount, such as £300,000, £500,000 even unlimited cover so you don't have to work it out.

The premiums are worked out using the number of bedrooms, type of property and postcode and the sum insured is the same all policyholders.

*Scarlett

Many insurers offer a blanket cover - £500k to £1m or unlimited.

The price that you pay is still based on your own details and the property details but you don't need to calculate an actual rebuild cost unless your mansion is approaching the cover limits for rebuild

Beccilou

Also try BCIS calculator as this is what we have used previously.

Parkumicarum

Don't just accept the ABI valuation either! My home was valued at £143k when we bought it in 2006. Recent sales on our road suggest prices have not dropped in the intervening period. The ABI says my rebuild cost is £221k (actually they could only do it's value without the extension but it worked out at a smidge over £1k per square metre so we scaled up). How the heck can rebuild cost be that much more than the property is worth?

I should also mention that when we took the mortgage out in 2006, the rebuild cost was quoted as £114k!

InsideInsurance

Parkumicarum wrote: »

How the heck can rebuild cost be that much more than the property is worth?

Exceptionally easy.

Without wanting to cast any comment on your house of the area you live in..... If you have a poor area you can frequently find that the sales prices of houses are well below the rebuild cost. A friend bought a house that had had squaters in it, vacant for a few years and on the edge of a very rough area. It was a mid terrace 4 bed house and he paid £30,000

No way on earth could you flatten that house, factoring ensuring no damage to the attached neighbours, clear the site and rebuild it from foundations up for anywhere close to just £30k

That said, the ABI tool is just an estimator and cannot replace the experience of a proper surveyor with local knowledge

System

InsideInsurance wrote: »

No way on earth could you flatten that house, factoring ensuring no damage to the attached neighbours, clear the site and rebuild it from foundations up for anywhere close to just £30k

Why then do insurers pay out for rebuilding, rather than just paying the market cost of buying another?

When a crashed car is estimated to cost more to repair than it is worth, they write it off. They aren't interested in the total rebuilding cost, it's not an option.

InsideInsurance

Clifford_Pope wrote: »

Why then do insurers pay out for rebuilding, rather than just paying the market cost of buying another?

When a crashed car is estimated to cost more to repair than it is worth, they write it off. They aren't interested in the total rebuilding cost, it's not an option.

It is a good question, and I cannot give an definite answer, though with the race to the bottom maybe in the future we will see some that provide a lesser of rebuild/ market value. As some general possibilities:

Home insurance is not done on an indemnity basis in most cases its normally new for old and so insurers normally pay beyond the value for all claims.

Secondly, a home is a more personal thing than a car. Telling someone they have to replace their car because it is beyond economical repair is generally accepted by most. It is easy to buy a new car, you can do it in a matter of hours, most people dont really care exactly which car they have as long as its reliable, meets their needs etc and life continues on as normal.

Tell a person they have to move home, who knows how long it'll be before they can find another house they like, they may have to move areas which can cause problems with friends, family, schools etc all of which are much bigger life changing events than just getting a new car. I wouldnt want to be the PR manager having to deal with the first tabloid headlines on this

Thirdly valuing a property can be massively more difficult than a car. If you have a Ford Fiesta 1.25 GL from 2000 there is a relatively little amount of variance in prices between a top example and a bottom example and there is software to value it for you. A 3 bed house can range from under £30,000 to over £30m. Even the relative "experts" of estate agents struggle to value some properties, a colleagues was valued at £500k, £600k and £650k because there are no other examples in the area and so how much people in the area may want a 400 year old thatch cottage is fairly untested.

Finally, if you compared the cost of market value + cost of buying a new house (legal fees, surveyors etc) + cost of making safe the remains of the old property inc potentially neighbouring buildings then I suspect the number of cases where this is cheaper than simply rebuilding is relatively small and again you get back to the PR aspect of one bad case -v- the millions of customers who will never be impacted as the rebuild is a fraction of its market value.



The PR aspect -v- savings is a very big consideration. We conducted analysis in the past when trying to align brand positioning and product for a company that owned a portfolio of brands. One of the challenges we had was that many of the extra features of a policy that could be stripped off were all very small cost for a claims perspective but if a press article ever hit the front pages the lost business would massively outweigh the claims.

For example we could remove childseat cover to make a cheaper product but it represents less than 0.01% of claims costs but imagine the headlines of X insurer refuses to pay to replace it and then gets injured in an accident afterwards and the seat fails.