Home Building Cost for home insurance

My house is insured for 240000 with AA they sent me a renewal letter stating the house is under insured and recommended 250000. The letter went on to say if there's a claim on contents and the house remains under insured I wont receive the full claim-this sounds like "increase your policy or we wont pay on contents!"

How can I find out how much it would cost to rebuild or should I take their word for it.

The Society of Chartered Surveyors publish a guide to rebuilding costs on their website here.

cheers LD

Depending on where your house is - the average rebuild cost varies - Dublin was traditionally dearer than the West.

A rough guide in todays market would be 100 Euro's per square foot or 1100 per m2.

Alot of people were 'duped' into believing that if theypaid 400,000 for it then they should insure it for that !, without realising that the purchase cost includes other 'big' items like Site Cost, and closeness to servises - all of which your insurance co will have little regard for if your claiming.

I recently rang the AA for a quote and like you they couldn't quote for less than 250,000 so it seems they like to keep that as a minimum amount.

Anyway Allianz were much cheaper for increasd contents cover.

tommyg said:

Depending on where your house is - the average rebuild cost varies - Dublin was traditionally dearer than the West.

A rough guide in todays market would be 100 Euro's per square foot or 1100 per m2.

Alot of people were 'duped' into believing that if theypaid 400,000 for it then they should insure it for that !, without realising that the purchase cost includes other 'big' items like Site Cost, and closeness to servises - all of which your insurance co will have little regard for if your claiming.

I recently rang the AA for a quote and like you they couldn't quote for less than 250,000 so it seems they like to keep that as a minimum amount.

Anyway Allianz were much cheaper for increasd contents cover.

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I would suggest that the rate you have quoted is very low. The society of Chartered Surveyors give sound advice on rebuilding costs and i would strongly recommend that people refer to this when considering rebuilding costs. Of course building rates vary according to type of construction, part of the country, and if you shop around, get direct labour etc, you can get it done cheaper. However, i would strongly advise that this logic not be used as the basis of calculating rebuilding costs.

Hi Claimsman,

100 Euro's per Sq ft is not 'too low' in todays market.

The SCS advice is actually based on March 2009 estimates which actually relate to end 2008 figures which as we all know now - IS HISTORY !!

A good tendering will generate much more interest today from alot of idle builders .. and your house insurance should be based on the CURRENT rebuild cost not what the Ins. co would like you to insure it at.

Don't forget alot of policies had automatic Index Linking increases, which now amounts to over insured and a waste of money.

tommyg said:

Hi Claimsman,

100 Euro's per Sq ft is not 'too low' in todays market.

The SCS advice is actually based on March 2009 estimates which actually relate to end 2008 figures which as we all know now - IS HISTORY !!

A good tendering will generate much more interest today from alot of idle builders .. and your house insurance should be based on the CURRENT rebuild cost not what the Ins. co would like you to insure it at.

Don't forget alot of policies had automatic Index Linking increases, which now amounts to over insured and a waste of money.

Click to expand...

I dont agree with you. Whilst i fully accept that rebuilding rates are dropping, i have not seen any evidence of the rebuilding rates that you are suggesting. I am involved in this in a professional capacity.

I do accept that there is an element of over insuring properties and examining sums insured is a prudent thing to do. However, i would urge people to take the appropriate advice, including from their brokers or from insurers, when establishing the rebuilding cost of their homes. My advice is, and remains, to refer to the Society of Chartered Surveyors. Establishing rebuilding costs is not an exact science and in such circumstances, we must avail of the best current information available rather than hearsay. The SCS do provide the best information available at present.

The whole purpose of insurance is to provide a risk transfer mechanism. This provides peace of mind. I would hate to think that in the event of having a substantial loss, i would have to scamper around with the hope of finding a cheap builder in order that i can repair my home.

Tommyg, please dont feel that you need to use capital letters in red in order to get your point across to me. Thanks

I agree with Claimsman, I have seen a number of valuations by professionals recently where the Sum Insured for Rebuilding Costs has been higher than SCS's guide.