Rebuilding Costs (Insurance) / KBC Bank

J

JL77

Registered User
Messages
33
KBC Bank have written to me requesting me to increase my rebuilding costs in my insurance policy. Basically I changed house insurance provider this year. In 2006 KBC got an evaluation recommending house rebuild costs would be 368,000. This year I reduced my rebuild costs to 350,000 in agreement with my Insurance provider. KBC have written to me stating:

" In 2006 we received a valuation that recommended the property be insured for 368,000 for rebuilding purposes. Our underwriters in Royal & Sun Alliance have advised that the rebuilding costs have increased by 7%/year since that and 5% since 2009. That implies that your recommended insurance cover is 442,389"

WHAT A JOKE!!
How can they seriously imply that rebuild costs have gone up by 5% in 2009??

Even funnier is that they are referencing a guide form the society of chartered surveyors www.scs.ie. A guide which is stating that rebuild costs in Limerick are 1512/m2 - dearer than Cork and Galway and only 400/m2 cheaper than Dublin!!

Questions abide including - what planet are Royal and Sun Alliance and KBC on? Are the SCS working from a dark bunker that is recession proof?

And finally can a bank make you over insure your house when your mortgage is about 1 tenth of the house's sell price?

 
Hi,

I would be of the opinion that they can't make you over insure your home. Given the fallout of the property market labour costs, which make up a significant portion of rebuilding costs, have gone through the floor so surely the opposite, i.e. it now costs less to rebuild a home than in 2006, is the case.

The only thing to watch out for I'd say is the loan offer whereby it may stipulate that KBC determines the reinstatement value of the house at all times in the future.

But even if this is the case I don't see you having anything to fear if you have been truthful with your current insurer. If the worst happens and the house burns down which is then rebuilt from the proceeds of the buildings insurance policy then who are KBC to say that house hasn't been fully re-instated. No??
 
Have KBC requested that the insurance be increased to €442,389 or just recommended this?

Lenders insist that you keep the house insurance at the same level of cover as the rebuild costs as per the valuation that was provided when applying for the mortgage. You cannot reduce this without their permission. I have never heard of a lender request an increase above that amount.

www.moneybackmortgages.ie
 
Thanks for your replies, KBC state:

" This means that your property is under insured and fortunately we cannot accept this policy until we receive the recommended insurance cover. We strongly advise you to instruct ... insurance to increase cover as in the event that a claim is made you would be liable for any shortfall in the insurance cover.

Alternatively you can consult the society of chartered surveyors website. This website provides a minimum based cost for rebuilding your property. Should this website provide you with a lower recommended cover please confirm that you are happy to proceed with their quotation"

So they recommend using an incompetent societies guide, which states that the minimum cost for rebuild in Limerick is 1512/m2!!
 
a one liner from a KBC valuer will actully sort out the issue regarding an up to date Re building insurance figure...ring KBC first to find out the panel in your area and if they will cover the cost !!! ( i doubt it )

What wever is discussed you must then put it back in writing to KBC to back up your case in the future.

Good Luck
 
You must log in or register to reply here.
Back
Top