Query on modifying House insurance cover

I

iwsf

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Quick query.
i over insured my house (like many people) 4 years ago when i took our mortgage, building was insured for 280000. Now when my insurance was up for renewal earlier on this year i insured it for 200000 only thus reducing my premium.
Re-building the house would cost 200000 and not 280000
The problem now is that my mortgage company is chasing me, they want either an official valuation (will cost 300 euros) saying that the re-building cost would be 200000 or an increase building cover back to 280000.

Can't we insure it for what we want ?
Are they allowed to do this ?

Any advices welcome
Thank you
 
who owns the house? if you've a mortgage the bank does so obviously they have an interest in the re-building costs!!
 
You can insure it for what you want once you own it but for now due to the terms and conditions of your mortgage the bank decides how much you need to have it insured for. The only thing they can go on is the reinsurance figure on the valuation (which is 4 years old). A new valuation should cost €130 not €300. Otherwise you will have to increase the cover to the original level or find yourself in breach. Thems the rules unfortunately.


www.moneybackmortgages.ie
 
NorfBank said:
You can insure it for what you want once you own it but for now due to the terms and conditions of your mortgage the bank decides how much you need to have it insured for. The only thing they can go on is the reinsurance figure on the valuation (which is 4 years old). A new valuation should cost €130 not €300. Otherwise you will have to increase the cover to the original level or find yourself in breach. Thems the rules unfortunately.
Click to expand...

This is interesting. So are you better off reducing your home insurance by the prudent amount you think it's now worth.

And then only getting an official valuation if your insurer requests one?

Also, you mention a new valuation should cost €130. With whom?
 
TheJackal said:
This is interesting. So are you better off reducing your home insurance by the prudent amount you think it's now worth.

And then only getting an official valuation if your insurer requests one?

Also, you mention a new valuation should cost €130. With whom?
Click to expand...

Do you mean insurer or lender?

€130 is the normal price.
 
I would get the valuation done first then reduce the insurance. Check with your individual lender before doing anything though.

In my experience, lenders are happy with a one liner from the valuer who carried out the original valuation stating the reduced re build costs.
 
Went through the same recently with my mortgage provider (BOI).

I insured for 20k under the original valuation (3 years ago) but still almost 40k over today's cost to rebuild. They wrote advising me it was underinsured. Before I got a chance to reply, I got another letter stating I hadn't replied and that they had modified their records accordingly and that I should discuss with my house insurance provider the implications of being underinsured (which I'm definitely not). I was happy to leave it at that.

However, now I'm wondering could they pull the tracker rate from me as I have breached one of their terms? Or, would they push the insurance issue more? Or, is there something else I have overlooked on the mortgage contract side?
 
NorfBank said:
I would get the valuation done first then reduce the insurance. Check with your individual lender before doing anything though.

In my experience, lenders are happy with a one liner from the valuer who carried out the original valuation stating the reduced re build costs.
Click to expand...

The real issue is, after paying 130euro for a revaluation, would I save more than that on my now lower home insurance costs?

I'd doubt not in most cases for year 1, but the reduced premia each year thereafter would probably be worth it.
 
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