Who sets out the rebuilding cost for building insurance?

fryderykchopin

I received my mortgage offer from HSBC which requires me to arrange Buildings Insurance for at least the “Full Reinstatement Cost” (or rebuilding cost) of the property.

i understand this is common practice among lenders however I wonder how I am supposedly to find out that figure for my insurance.

I was expecting my lender HSBC to provide the valuation report they received which would say the full reinstatement cost, however they have not provided any results regarding their valuation of the property.

Does anyone know if HSBC share their valuation report with customers if asked to do so, and if it contains such full reinstatement cost?

Otherwise, am I supposed to arrange my own valuation to find out what the reinstatement cost of the property is?

eddddy

HSBC probably won't give you a copy of the valuation report, but they should be able to tell you what the valuer stated the reinstatement cost to be. If it definitely isn't stated anywhere on your mortgage offer, phone HSBC and ask.

You can also use an online calculator, but this may be less accurate: https://abi.bcis.co.uk/calculator/calculator.aspx
Or you can instruct a RICS valuer to calculate the reinstatement cost (but that'll cost you a chunk of fees).

Or some insurers charge premiums based on the number of bedrooms (and other factors) in the house - without you having to specify a reinstatement cost.

fryderykchopin

eddddy said:

HSBC probably won't give you a copy of the valuation report, but they should be able to tell you what the valuer stated the reinstatement cost to be. If it definitely isn't stated anywhere on your mortgage offer, phone HSBC and ask.

You can also use an online calculator, but this may be less accurate:
Or you can instruct a RICS valuer to calculate the reinstatement cost (but that'll cost you a chunk of fees).

Or some insurers charge premiums based on the number of bedrooms (and other factors) in the house - without you having to specify a reinstatement cost.

Will HSBC (or any bank) accept that the customer insures the property based on an online valuation tool? I would be surprised if they do - but I’m also surprised that they haven’t told me how much they want me to insure the property for.

boo_star

fryderykchopin said:

eddddy said:

HSBC probably won't give you a copy of the valuation report, but they should be able to tell you what the valuer stated the reinstatement cost to be. If it definitely isn't stated anywhere on your mortgage offer, phone HSBC and ask.

You can also use an online calculator, but this may be less accurate:
Or you can instruct a RICS valuer to calculate the reinstatement cost (but that'll cost you a chunk of fees).

Or some insurers charge premiums based on the number of bedrooms (and other factors) in the house - without you having to specify a reinstatement cost.

Will HSBC (or any bank) accept that the customer insures the property based on an online valuation tool? I would be surprised if they do - but I’m also surprised that they haven’t told me how much they want me to insure the property for.

Do they care?  As long as the amount it's insured for is greater than the mortgage amount they can't lose.

AdrianC

There's an industry-standard rebuild price calculator. Use that figure, and you won't go far wrong.
https://abi.bcis.co.uk/

But a lot of buildings policies now simply say "up to £1m".

davidmcn

boo_star said:

fryderykchopin said:

eddddy said:

HSBC probably won't give you a copy of the valuation report, but they should be able to tell you what the valuer stated the reinstatement cost to be. If it definitely isn't stated anywhere on your mortgage offer, phone HSBC and ask.

You can also use an online calculator, but this may be less accurate:
Or you can instruct a RICS valuer to calculate the reinstatement cost (but that'll cost you a chunk of fees).

Or some insurers charge premiums based on the number of bedrooms (and other factors) in the house - without you having to specify a reinstatement cost.

Will HSBC (or any bank) accept that the customer insures the property based on an online valuation tool? I would be surprised if they do - but I’m also surprised that they haven’t told me how much they want me to insure the property for.

Do they care?  As long as the amount it's insured for is greater than the mortgage amount they can't lose.

I don't think that's necessarily the case. If you under-insure then you're not entitled to just "cash in" the amount you covered.

AdrianC

davidmcn said:

boo_star said:

fryderykchopin said:

eddddy said:

HSBC probably won't give you a copy of the valuation report, but they should be able to tell you what the valuer stated the reinstatement cost to be. If it definitely isn't stated anywhere on your mortgage offer, phone HSBC and ask.

You can also use an online calculator, but this may be less accurate:
Or you can instruct a RICS valuer to calculate the reinstatement cost (but that'll cost you a chunk of fees).

Or some insurers charge premiums based on the number of bedrooms (and other factors) in the house - without you having to specify a reinstatement cost.

Will HSBC (or any bank) accept that the customer insures the property based on an online valuation tool? I would be surprised if they do - but I’m also surprised that they haven’t told me how much they want me to insure the property for.

Do they care?  As long as the amount it's insured for is greater than the mortgage amount they can't lose.

I don't think that's necessarily the case. If you under-insure then you're not entitled to just "cash in" the amount you covered.

No, but at least the lender won't end up with facing repossession of a half-built replacement for the smouldering ruin when you realise you under-insured and run out of money.

newsgroupmonkey_

Yeah, I guess it was useful that I was able to view the report and get the rebuild cost from there.
Out of interest, is it up to you to get it re-evaluated regularly?

AdrianC

newsgroupmonkey_ said:

Out of interest, is it up to you to get it re-evaluated regularly?

Buildings policies are annual.