House insurance rebuild costs

Declan1

Hello, anyone have any pointers?

I'm looking to get a home insurance quote on a bungalow of approx 3,500 sq feet. It's in Kildare within the Dublin commuter belt. The SCSI calculator is giving me a figure of 600k which seems very high? Any suggestions on where to get a realistic figure? Or is 600k for a 3500sq ft bungalow about right?

Thanks.

The_Conductor

Not enough information to go on. 3,500 square feet is a substantial bungalow- but then again- there could be factors affecting the rebuild quote that we're not familiar with.

I've just reinsured 2 16 unit apartment/townhouse units @ 1 million a piece- which is a quarter of what they were insured at in the boom (then again- the rebuild costs can't be *that* different surely).

You need to get a proper reconstitution valuation done. Maybe 600k is too high- maybe not. Its a bit like asking how long is a piece of rope.

Declan1

Thanks. I appreciate that you need more details to come to an accurate valuation - I'm not looking for somebody to give me a figure here. Just wondering am I right in thinking that 600k seems like an awful lot to rebuild? Looking at insurance figures before completing the purchase...

The_Conductor

It could be a valuation that was done during the boom, and was never reassessed. We did a reconstitution survey here- and found we had 4 times more insurance cover than we needed.

The rebuild cost seems excessive- but it could be accurate- if for some reasons it would cost that to build the place (excluding site costs).

I would reasonably expect this figure to be much lower, if I had a survey done- but I'm saying this from a point of having no information really to work off.

Declan1

Thanks. The figure of 600k is coming from the online calcuator on the SCSI, not from any survey that may have previously been carried out on the actual property. I'll see if the surveyor can shed any light on it when he goes in.

The_Conductor

The maximum an insurance company will pay- is the rebuild cost- irrespective of what you have it insured for- so if you put an insurance policy of 10 million on a house that costs 100k to rebuild- and it burns down- you get 100k, not 10 million (though you'll have been paying on a 10 million policy). Over insuring yourself is costly and pointless.

kkelliher

Declan1 wrote: »

Hello, anyone have any pointers?

I'm looking to get a home insurance quote on a bungalow of approx 3,500 sq feet. It's in Kildare within the Dublin commuter belt. The SCSI calculator is giving me a figure of 600k which seems very high? Any suggestions on where to get a realistic figure? Or is 600k for a 3500sq ft bungalow about right?

Thanks.

This figure on the scsi index is not geared towards one off properties in rural areas. It is a guide to the minimum value you should insure for rebuilding in the event of maximum loss. It includes for the rebuild but also the demolition and removal of the damaged structure, design team fees and also an allowance for current building regs.

You need to get advice in respect to your local costs but 600k would not be far away for a finished house of that size

newbie2013

How does one calculate the insurance on ones home. I built my house, self build and built it cheaper than others with doing most of the work during the boom years and had the insurance as high as 350k back in 2007 but brought it down with house prices falling. I even had it as low as 100k 2 year ago but wiith the new company i went with, theyre least is 150k insurance. Now i typed it into the SCSI calculator and its saying its 280k rebuild. Would this make my insurance void because i had it priced so low. This has me worried now.

The_Conductor

It wouldn't make it void- it would mean if there was a catastrophic event that necessitated reconstituting the property- the max they would give you is the max you are insured for. For more minor events- if they determined you were 50% underinsured- would be 50% of the damage claimed.

Your insurance isn't void- its just set at an inappropriate level.

newbie2013

The_Conductor wrote: »

It wouldn't make it void- it would mean if there was a catastrophic event that necessitated reconstituting the property- the max they would give you is the max you are insured for. For more minor events- if they determined you were 50% underinsured- would be 50% of the damage claimed.

Your insurance isn't void- its just set at an inappropriate level.

Do insurance companies have their assessors to value ones property. After reading this, i want my house insured at the right amount

The_Conductor

newbie2013 wrote: »

Do insurance companies have their assessors to value ones property. After reading this, i want my house insured at the right amount

I'm not in the industry- I would believe an assessor would assess the damage and ascribe a cost to it- I am not sure whether they would look at the reconstitution cost of the property- or whether this would be done by other mechanisms- though it would make logical sense for them to do so.

newbie2013

The_Conductor wrote: »

I'm not in the industry- I would believe an assessor would assess the damage and ascribe a cost to it- I am not sure whether they would look at the reconstitution cost of the property- or whether this would be done by other mechanisms- though it would make logical sense for them to do so.

I didnt mean if the house was damaged, i was thinking more now for my insurance renewal so im properly covered.

kkelliher

The responsibility to insure for the correct amount lies with the homeowner (policy holder) insurance companies dont get involved in this aspect.

the cost of rebuild which is what you insure for is the industry cost and not what you got it built for or if you pay cash etc. You could die in the fire that damages your home etc and a builder may therefore be required. The value must also take account of the latest building regs as any new build would need to meet current regs. You will need to demolish the damaged item and you will need to have architects etc. Also the build cost includes everything from kitchen to wardrobes to tiles timber floors etc as a finished product. If you under insure and claim you make will be reduced by the same % as the overall underinsurance.

if you make a claim the adjuster (assessor works for you an adjuster works for insurance company) will do a calculation on the insured value to see if you are adequately insured and this is when you see the effect irrespective of the value.

notharrypotter

Just wondering.
If someone had a large house and it was correctly insured for rebuild as per market norms.
If some thing happened and the owner agreed with the insurance company to rebuild a smaller property at lesser cost.
What would be the situation re the insured different value

newbie2013

kkelliher wrote: »

The responsibility to insure for the correct amount lies with the homeowner (policy holder) insurance companies dont get involved in this aspect.

the cost of rebuild which is what you insure for is the industry cost and not what you got it built for or if you pay cash etc. You could die in the fire that damages your home etc and a builder may therefore be required. The value must also take account of the latest building regs as any new build would need to meet current regs. You will need to demolish the damaged item and you will need to have architects etc. Also the build cost includes everything from kitchen to wardrobes to tiles timber floors etc as a finished product. If you under insure and claim you make will be reduced by the same % as the overall underinsurance.

if you make a claim the adjuster (assessor works for you an adjuster works for insurance company) will do a calculation on the insured value to see if you are adequately insured and this is when you see the effect irrespective of the value.

So if im insured for 150k and the house takes 200k or more to build, i wont get the 150k because i under valued it.

newbie2013

kkelliher wrote: »

The responsibility to insure for the correct amount lies with the homeowner (policy holder) insurance companies dont get involved in this aspect.

the cost of rebuild which is what you insure for is the industry cost and not what you got it built for or if you pay cash etc. You could die in the fire that damages your home etc and a builder may therefore be required. The value must also take account of the latest building regs as any new build would need to meet current regs. You will need to demolish the damaged item and you will need to have architects etc. Also the build cost includes everything from kitchen to wardrobes to tiles timber floors etc as a finished product. If you under insure and claim you make will be reduced by the same % as the overall underinsurance.

if you make a claim the adjuster (assessor works for you an adjuster works for insurance company) will do a calculation on the insured value to see if you are adequately insured and this is when you see the effect irrespective of the value.

When you say pay cash, how does a claim even work. Say if the worst case scenario happens and the house has to be built again. Who builds it. Is it the insurance company and you take a back seat or do they write you a cheque and you get a builder to build it or self build.

Victor

Declan1 wrote: »

I'm looking to get a home insurance quote on a bungalow of approx 3,500 sq feet. It's in Kildare within the Dublin commuter belt. The SCSI calculator is giving me a figure of 600k which seems very high? Any suggestions on where to get a realistic figure? Or is 600k for a 3500sq ft bungalow about right?

Your house is the size of 3 or 4 typical semi-detached houses, so the valuation isn't necessarily wrong. As you have a custom house, talk to a local quantity surveyor about getting a valuation done. It should cost €150-250.

notharrypotter wrote: »

Just wondering. If someone had a large house and it was correctly insured for rebuild as per market norms. If some thing happened and the owner agreed with the insurance company to rebuild a smaller property at lesser cost.
What would be the situation re the insured different value

It can be done. However, if the insurer has suspicions, they may insist on full reconstruction.

If the property was worth €200,000, was insured for €200,000, but you rebuilt a smaller property for €100,000, then the insurer would normally give you the balance as cash.

However, if the property was worth €200,000, was insured for €500,000, but you rebuilt a smaller property for €100,000, then the insurer would normally only give you the balance of €100,000 (€200,000-€100,000) as cash. If there was a dispute over the €200,000 value, or purchase price was less than reconstruction cost or perhaps suspected arson, they might insist on full reconstruction.

Victor

newbie2013 wrote: »

So if im insured for 150k and the house takes 200k or more to build, i wont get the 150k because i under valued it.

You have only insured 75% of the value. If you have a total loss, the most you will be is the €150,000. If you have a partial loss, you will only get 75% of the loss.

http://en.wikipedia.org/wiki/Condition_of_average

Note that the reconstruction value needs to be reasonable - if you insured for only 98%, the insurer might not take off the 2%.

newbie2013 wrote: »

When you say pay cash, how does a claim even work. Say if the worst case scenario happens and the house has to be built again. Who builds it. Is it the insurance company and you take a back seat or do they write you a cheque and you get a builder to build it or self build.

Who builds it is largely a matter between the insured, their advisors and their contractor. The insurance company doesn't normally get involved in the nitty-gritty of reconstruction. Normally during the reconstruction, the insurer will make stage payments base on the certification of the architect or quantity surveyor.

kkelliher

newbie2013 wrote: »

So if im insured for 150k and the house takes 200k or more to build, i wont get the 150k because i under valued it.

No you would get the 150k max and would have to cover the balance yourself. In reality you would get approx 70% of the 150k upfront and the balance on production of invoice to prove how much you have spent