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Re-build cost for Home Insurance

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  • 28-09-2012 11:10am
    #1
    Branch
    Registered Users Posts: 56 ✭✭


    Hi,

    I'm a first time buyer and looking around for home insurance. I was told it must be on the re-build cost not the value of the house which makes sense....but someone told me don't insure the house for the full re-build. He said the 2 major things that can happen are flooding and fire and he said either way the foundation and walls will still be there. Thats the most expensive part of any house. So is it advisable to get the house insured for lets say 100k rather than the 200k amount......

    Any opinions or suggestions??? After all insurance companies what to over insure you so they get more money.


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    #2
    Tow
    Registered Users Posts: 6,730 ✭✭✭Tow


    He is not taking into account the cost of clearing the site, which could be 10s of k. In any event the bank will not give you the mortgage if they are not happy with the level of insurance.

    You also need to remember how insurance companies payout. For example, you have a leak and 5K of damage is caused, when it comes time to payout they will look at your level of cover and if they decide you are under insured to rebuild your house by 25% they will only payout 75% of the 5K.

    When is the money (including lost growth) Michael Noonan took in the Pension Levy going to be paid back?



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    #3
    Branch
    Registered Users Posts: 56 ✭✭Branch


    Tow wrote: »
    He is not taking into account the cost of clearing the site, which could be 10s of k. In any event the bank will not give you the mortgage if they are not happy with the level of insurance.

    You also need to remember how insurance companies payout. For example, you have a leak and 5K of damage is caused, when it comes time to payout they will look at your level of cover and if they decide you are under insured to rebuild your house by 25% they will only payout 75% of the 5K.



    Thanks Tow! That is a good point. you're right its best to insure for the full cost.


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    #4
    sensitive1960
    Registered Users Posts: 40 ✭sensitive1960


    If you are a first-time buyer and getting a mortgage you will have to get a valuation done. This will show both market value and re building cost. The bank will not give you the mortgage unless you insure for rebuilding cost.

    BTW many insurance policies no longer apply the average clause(deduction for under-insurance)


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    #5
    phormium
    Registered Users Posts: 3,309 ✭✭✭phormium


    Don't know about companies not using the average clause, I was shopping around last week for house insurance and practically every company I talked to wanted me to increase my buildings insurance to match the Chartered Surveyors site, even though it is a very generalised pricing and really I did not feel met the needs of rebuild cost for my house at all, anyway they all pointed out that the average clause would apply if I failed to insure for what they considered the rebuild cost.


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