Undervalued rebuild cost so insurers ratioing payout

daveyjp

Dips said:

daveyjp said:

What total gross external floor area has she calculated?

282 m2 I think 

£1300-1500 per sq m rebuild costs wouldn't be excessive.  Circa £350 to £400k for your property.

mjm3346

From an older thread on here
"Getting quotes for renewal and according to bcis calculator my rebuilding cost is £225k but my little bog standard mid terrace only has a value of £102k. I don't want to under insure but isn't this difference odd?"

https://forums.moneysavingexpert.com/discussion/5091929/house-value-v-rebuilding-cost

Dips

daveyjp said:

Dips said:

daveyjp said:

What total gross external floor area has she calculated?

282 m2 I think 

£1300-1500 per sq m rebuild costs wouldn't be excessive.  Circa £350 to £400k for your property.

They seem to have calculated the main build at £1480 per sq m, dormer at £1110 and a little extension at £1100

TELLIT01

Nearly 3000 square feet seems a lot for a 4 bed end terrace.  Have you checked the measurements?

daveyjp

Good to know my 'fag packet' calculator is still functioning.  On the basis of those figures you are underinsured. 

Claims may well be reduced in the same proportion as the under insurance figure, in your case circa 50%?

Worth a read.

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/insurance/home-buildings-insurance/underinsurance-home-insurance-complaints

Dips

Good read that link. 

The insurance was taken out over the phone and I wasn’t given any guidance how to work out the rebuild cost. Half a leg to stand on maybe?

Weighty1

Dips said:

Good read that link. 

The insurance was taken out over the phone and I wasn’t given any guidance how to work out the rebuild cost. Half a leg to stand on maybe?

Probably not.  Unless you receive some form of an initial disclosure document/terms of business which stated you were being offered advice.  If you were offered advice they were, in effect, just order taking from you as to what you wanted (although they may ask a few questions to limit the choice).  Home insurance is invariably sold without advice in probably 95%+ of cases.

naedanger

Dips said:

Good read that link. 

The insurance was taken out over the phone and I wasn’t given any guidance how to work out the rebuild cost. Half a leg to stand on maybe?

From the link there does seem to be possible avenues to explore.

You need to go through the documentation that was sent to you at the point of sale. (And perhaps try to get a copy of the telephone call.)

Is it clear from the point of sale documentation (and/or call) that claims could be reduced if you had underestimated the rebuild cost? 

Was any guidance given on how you should calculate the rebuild cost or what the rebuild cost should cover?

If no guidance was given on how to calculate the rebuild cost and/or the policy documentation does not make clear claims would be reduced in the event you had underestimated the rebuild cost then I think a complaint might have a reasonable chance of success.

Dips

naedanger said:

Dips said:

Good read that link. 

The insurance was taken out over the phone and I wasn’t given any guidance how to work out the rebuild cost. Half a leg to stand on maybe?

From the link there does seem to be possible avenues to explore.

You need to go through the documentation that was sent to you at the point of sale. (And perhaps try to get a copy of the telephone call.)

Is it clear from the point of sale documentation (and/or call) that claims could be reduced if you had underestimated the rebuild cost? 

Was any guidance given on how you should calculate the rebuild cost or what the rebuild cost should cover?

If no guidance was given on how to calculate the rebuild cost and/or the policy documentation does not make clear claims would be reduced in the event you had underestimated the rebuild cost then I think a complaint might have a reasonable chance of success.

Couldn't find any reference to estimating the rebuild costs in the policy wording. No documentation was sent before I paid. No guidance on how to calculate rebuild cost whilst we were filling the details in on the phone. Should I be complaining about this to the loss adjustor, my brokers, or the underwriters?

The brokers called today after hearing about the difference in rebuild cost:my value and asked if I wanted to pay the extra money it would cost to cover the building at the more expensive rebuild cost. Obviously I paid.

naedanger

Dips said:

naedanger said:

Dips said:

Good read that link. 

The insurance was taken out over the phone and I wasn’t given any guidance how to work out the rebuild cost. Half a leg to stand on maybe?

From the link there does seem to be possible avenues to explore.

You need to go through the documentation that was sent to you at the point of sale. (And perhaps try to get a copy of the telephone call.)

Is it clear from the point of sale documentation (and/or call) that claims could be reduced if you had underestimated the rebuild cost? 

Was any guidance given on how you should calculate the rebuild cost or what the rebuild cost should cover?

If no guidance was given on how to calculate the rebuild cost and/or the policy documentation does not make clear claims would be reduced in the event you had underestimated the rebuild cost then I think a complaint might have a reasonable chance of success.

Couldn't find any reference to estimating the rebuild costs in the policy wording. No documentation was sent before I paid. No guidance on how to calculate rebuild cost whilst we were filling the details in on the phone. Should I be complaining about this to the loss adjustor, my brokers, or the underwriters?

The brokers called today after hearing about the difference in rebuild cost:my value and asked if I wanted to pay the extra money it would cost to cover the building at the more expensive rebuild cost. Obviously I paid.

Not the loss adjuster - you are not their client.
Where do you think the problem lies? Is the problem that the policy does not make clear all claims will be reduced if the rebuild cost has been underestimated? Or is the problem that the policy does not actually make clear what the rebuild cost is supposed to cover? Or is the problem the rebuild cost has been overestimated by the loss adjuster? For any of those problems I would complain to the insurer.

If you believe the broker did not sufficiently bring your attention to key features of the policy, or how questions should be answered, then complain to them.

I suspect you could also submit one complaint to both if you think both have some liability and see if either offer any solution. And if appropriate and necessary escalate to the Financial Ombudsman and let them allocate liability, if any, between the insurer and broker.