Rebuild cost for home insuranc

SkyandSun

Hi all,

I am struggling with rebuild cost on home insurance. I have used the BCIS cost estimator and get different results depending on whether how I class my property - it is essentially a 'link detached' bungalow (a single terrace of bungalow then a garage then a bungalow etc...) and there is no option for this on the calculator - choosing detached or terraced gives different rebuild values; £135k vs £160k.

Additionally, I have a rebuild cost from the survey I commissioned when I bought the property 8 years ago. This rebuild cost is about £160,000. So there is clearly a discrepency here - and the survey is from 8 years ago - so presumably the value will be different now!

I see the BCIS have a page that shows, on average, by how much how rebuild costs have risen each year. So I could just multiply up by the percentages for each year to arrive at a new figure. But I'm not sure how accurate this would be, given the survey was from 8 years ago - and additionally, the BCIS rebuild calculator is giving me lower figures. On the BCIS website it says I should get a new valuation from a surveyor at least every five years.

I am thinking maybe I need to get a chartered surveyor to give me a new rebuild value on the home and use that for the next few years, although this adds on more money that I kind of am struggling with right now. Maybe I should scale up my original £160k rebuild cost estimate from the survey to the current year as described above and then add on a bit to be safe (despite BCIS recommending a new valuation at least every 5 years)?

Any ideas on how to proceed? I don't want to under insure my home, and all the providers that I can find within my price range are basing their costs on rebuild value.

Thanks a lot!

davidwatts

Just find insurance with an unlimited buildings sum insured or something like "up to £500k". Those options are fairly common. If you really want to insure with a company that insists on a specific value, just do the scaling up and adding a bit for good measure you suggested. I wouldn't bother paying for a new valuation for a property that is neither that unusual or expensive to rebuild.

SkyandSun

Thanks. I'm having trouble finding an insurance company that has those 'up to X amount' options - having gone through four comparison websites, the lowest 4 quotes all vary depending on rebuild value and base their premium on that. Can you recommend any insurers who have those options?
Additionally I am in a flood area and a lot of insurers (via comparison websites at least) won't deal with that or exclude it, so it makes it trickier to find insurance!

SonOf

I'm having trouble finding an insurance company that has those 'up to X amount' options

Virtually all of them nowadays are bedroom rated plans. You tend to find that the sum insured plans only really get used by those with 6 or more bedrooms, non standard construction or properties with significant outbuildings (e.g. barns etc)

having gone through four comparison websites,

The comparison sites are mostly bedroom rated plans. Not sum insured plans.

SkyandSun

Well maybe it's the fact that I'm in a flood risk zone and work from home as a teacher (so use the home as a businesss address) that's ruling out bedroom-rated policies, for some reason (I know a lot of insurers won't return a quote to me because they don't work with one or both of these factors; on the comparison sites, only about 30% of the insurers will return a quote to me, and about half of those have excluded flood cover, despite my property never having flooded in its history, but being in a villlage that has flooded very occasionally). Every single policy I've looked at from the four main comparison websites has been basing its premium on rebuild value, as far as I can tell; and when I get to the point of looking at the policy documents, has policy wording saying it's basically insured up to this amount.

All of the comparison websites ask me to input a figure for rebuild value. If I change this figure, the premiums pretty much all then change.

Unless I'm missing something obvious?

I think I may take the first reply's advice; scale up my original rebuild value from 8 years ago, add on 15%, and use that, if that seems reasonable (I have so far found one bedroom-rated policy by manually going to Sainsbury's website - so not using a price comparison site - that came back £100 higher than my other quote, that was using the rebuild value calculated on the basis I've just described).

Chickenlips

In my experience, the cheapest insurance is usually cheaper for a reason. As someone that works in insurance, it is always horrible to decline a claim on a cheap policy knowing that had the client spent a little more per year (£50-£100) they wouldn't be facing £15k in repairs bills as the incident would have been covered on slightly more expensive policies.

The true comparison of cover lies within the policy conditions, general exclusions, and peril exclusions. Most policies cover the same perils, but it is what they exclude under those headings that makes a difference.

Based on what you've said in your post, a broker might be your best bet.

In terms of the rebuild value, I'd be tempted to pick a sum that's going to be too high (such as £300,000) to be safe. The ramifications of getting it too low are the insurers applying average. Average is where they work out what percentage of your sum insured equals against the rebuild value. On a smaller claim, it isn't an issue. But, if you were 20% under on a claim of £100k, that's a lot for you to swallow in comparison to the money saved on premiums. I'd also suggest doing the same with contents.

daveyjp

State £160k and redo with £200k, the difference will probably be marginal as in my experience home insurance for traditional build property is quite reasonable.

SkyandSun

Chickenlips wrote: »

In my experience, the cheapest insurance is usually cheaper for a reason. As someone that works in insurance, it is always horrible to decline a claim on a cheap policy knowing that had the client spent a little more per year (£50-£100) they wouldn't be facing £15k in repairs bills as the incident would have been covered on slightly more expensive policies.

The true comparison of cover lies within the policy conditions, general exclusions, and peril exclusions. Most policies cover the same perils, but it is what they exclude under those headings that makes a difference.

Based on what you've said in your post, a broker might be your best bet.

In terms of the rebuild value, I'd be tempted to pick a sum that's going to be too high (such as £300,000) to be safe. The ramifications of getting it too low are the insurers applying average. Average is where they work out what percentage of your sum insured equals against the rebuild value. On a smaller claim, it isn't an issue. But, if you were 20% under on a claim of £100k, that's a lot for you to swallow in comparison to the money saved on premiums. I'd also suggest doing the same with contents.

I was in touch with one broker who gave an insurance policy that, even on my original low rebuild value (£135k, I think), returned prices £200 more than what I had paid last year (who could no lolnger insure me because I had more than 5 business visitors on one day of the week). If there are any brokers you might recommend I'd appreciate hearing them.

Re: averages, if the damage is less than the insured value (say the £100k you mentioned, which is within the limit insured), would they commission a full survey of rebuild value to make sure the property was valued correctly? (and as I have mentioned, I am not trying to underinsure!).

BTW I am not going for the cheapest insurances - the cheapest ones exclude flood cover, for one thing. Most insurers don't actually return a quote so it is a limited selection that will give me a quote! I have been extremely throrough for the last four days trying to get this right. It's actually made me a bit unwell - I can occasionally get obsessive anxiety and this has been one of those times.

£300,000 rebuild value seems high, even being generous, and again it makes a notable difference to what I'm paying. I don't have contents insurance and have a minimal income by most people's standards, to be honest, so this sort of thing matters. The BCIS calculator gives a low value for rebuild, and the most 'expensive' rebuild value I can come up with is to use the rebuild value when I bought the property in the survey that was commissioned, scale it up using BCIS' annual inflation figures, and then add on 15% as a safety net. This is the highest figure (by quite some margin, in the case of the BCIS rebuild calculator) out of all the methods I have taken to estimate rebuild value. Does this not seem like a reasonable approach? (genuine question).

SkyandSun

daveyjp wrote: »

State £160k and redo with £200k, the difference will probably be marginal as in my experience home insurance for traditional build property is quite reasonable.

Do you mean redo the quotes with a £200k rebuild value? I've actually redone them with £231k, which is based on scaling up my original rebuild value when buying the property 8 years ago, and adding on 15%.

BCIS calculator puts rebuild value at either £135k or £160k, depending if select terraced or detached (the bungalow is in fact 'link detached' as described in my original post, but no option for that in the calculator). On that basis I am overinsuring by quite a lot, but I am assuming that the figure from my survey 8 years ago is the more accurate one (even though I am scaling it up for 8 yrs of inflation). I am at the point with all this where I am finding it hard to see clearly to be honest! So maybe I am taking this figure too high. (It's a two bedroom bungalow with a small conservatory btw, in a part of the country with a high cost of living)

Thanks

davidwatts

Just out of interest, have you tried the Co-op, who give up to £500k cover as standard? Assuming your property has never actually been flooded it should just be a matter of whether they accept risks in your area or not. (I assume you could agree to their assumption in terms of business use, "The property is not used for business purposes other than office work, childminding or private tuition.")

garth549

Unless they've changed recently Directline and Aviva both have high rebuild limits as standard (either 500k or 1m)

Neither are on price comparison sites and both have great cover. I've found their cost isn't much higher than budget insurers too.