Cost of rebuilding insurance

DullGreyGuy

Luke451 said:

Out of curiosity, is it not quicker for the insurance to close my mortgage and give me another home?

Considering that the would be paying the rent up to 100k total...

Not necessarily they will save money, but at least they close the long burocratic work quickly...

In some cases it could be, though as mentioned, rebuild is normally notably less than retail price. However, you should see the arguments had on if a TV is a suitable substitute for a 5 year old TV so imagine the arguments on if a property is like for like or not!

This would still leave the insurer having to deal with the damaged property they now own having given you a new home. There could be a lot of costs in making it safe/secure and unliked crashed cars, there isn't a bunch of national buyers of badly damaged homes. 

lika_86

daveyjp said:

Rebuild cost and market value are completely unrelated.

THIS. My rebuild cost in London was stated to be a third of the price we paid. Bit strange to think that most of the money we spent was on the plot rather than the things actually housing us.

daivid

On a total rebuild the house will have to be built to current building regs so potentially far more than the original build + inflation. As others have stated the land value can be ignored but that varies greatly and may or may not be enough to offset the modern build cost. 

FFHillbilly

FreeBear said:

eddddy said: But some older houses, perhaps built using 'old-fashioned' building materials and 'old-fashioned' building methods might be more expensive to rebuild. Especially, for example, if they are part of a terrace.

Rebuilding one property in a terrace isn't going to cost much more - You still have two walls to work off.

The problem comes if it is only a partial loss, a listed building, or within a conservation zone (including a National Park). The local planning department (and conservation officer if involved) could impose some restrictive conditions such as traditional materials that would inflate the costs.

rebuilding a mid terraced house is actually going to be even more complicated than working on a detached, it's going to be hard to knock down the middle house without the other ones falling apart. 

sheramber

Luke451 said:

user1977 said:

If you're buying with a mortgage, then the cover needs to be for at least the amount required by your lender. That normally comes with their valuation - have you not seen a figure?

There are also insurers who don't place a limit on the cover (they just know how much it ought to take to rebuild e.g. a 3 bed semi in postcode X). Bear in mind that the vast majority of claims are not for fully rebuilding the property, so the figure isn't likely to make a huge difference to the premium.

Thanks, so what they would rebuild? Just the walls and roof?

Only if the whole house was damaged  would they have to rebuild the whole house.