Home Insurance

Anyone know how a bank (or bank’s evaluator) decides the cost of to rebuild a house? I am buying a 4bed semi detached house outside Dublin for 275K, and the bank (or their evaluator) has decided that I need to insure it for at least 250K, which looks like a lot to me (quotes between 500 to 1100 euros a year)!

Bank already said they wouldn’t interfere with the evaluator/underwriters! Any thoughts?

Thanks a million!


mp.

The [broken link removed] is worth a read as it includes an ready reckoner which yields an approximate rebuilding/insurance cost. Individual lenders will establish their own rebuilding/insurance cost by having a surveyor look at the property.

Thanks Clubman!

Anyone got any tips about the best way to go about getting this type of insurance?

Broker or direct? Or via the bank/building society that you're borrowing from?

If broker, any names that stand out?

Thanks.

D.

My best offer, last January, was from http://www.123.ie/(not to say that they'll necessarily be the best today...)

Yes, I filled in their online form earlier and the quote was less than half the price of the others.

Too good to be true?

I'd be interested to know if anyone has ever claimed from 123?

Thanks.

D.

Dinarius said:

Yes, I filled in their online form earlier and the quote was less than half the price of the others.

Too good to be true?

I'd be interested to know if anyone has ever claimed from 123?

Thanks.

D.

Click to expand...

Note that 123.ie are a broker, not an insurer. Any claims would be made against the insurer, though the broker may sometimes help with this. My home insurance is with Axa through 123.ie.

Signed up with 123.ie - they were the cheapest for a basic cover. I tried different rebuild costs (from 180K, upto 250K), there wasn't much of a difference.

Is the €250K purely for rebuilding costs, or would it include contents. If it's just rebuilding costs it seems very high. Be aware that different insurers may view rebuilding costs differently. With some, it only covers the building. Things like the kitchen are excluded. If you try getting quotes from a number of insurance brokers, they should be able to give you an indication of what they feel the rebuilding cost would be. You can then compare that to the banks figures.

I calculated the rebuild cost based on 1500 sq. ft. at €200 per square foot, i.e. €300k.

Is that too much?

I then added €50k for architects, legals and contingency.

Make sense?

Thanks.

D.

Seems a bit excessive... The table of cost for House rebuilding shows about €160/sq.ft, so i would have thougt that €240k is more realistic.

It happens that i called my house insurance company this morning, and they indicated a rebuild cost of €245 for 144sqm (4 bed semi - 1700sq ft - build 12yrs ago, so very standard type of property).
Property market value is €350k+, site about €100k, so that leaves about €245k for rebuild cost, which seems to "match" the rebuild cost in above mentionned table.

Whatever figure you agree with the insurance should be used as reinstatement cost, so may be your are right, Check with you insurance and let us know.
But in the event of total destruction, will the insurance reimburse the real "rebuilding cost" or the "sum" you insured your hosue for?
I think the first one, as otherwise i could buy a house for €300k, insured it for €800k, burn it and just made €500k. A bit too easy...
All of that to say that over-estimated the cost does not bring any benefits..

Dinarius said:

I calculated the rebuild cost based on 1500 sq. ft. at €200 per square foot, i.e. €300k.

Is that too much?

I then added €50k for architects, legals and contingency.

Make sense?

Thanks.

D.

Click to expand...

If you use the [broken link removed] do you ahve to add €50k for architects, legals and contingency or is it included? Seems very high €50K.

Also on contents - what % of hse rebuilding do most people insure for?

Seagull said:

Is the €250K purely for rebuilding costs, or would it include contents. If it's just rebuilding costs it seems very high. Be aware that different insurers may view rebuilding costs differently. With some, it only covers the building. Things like the kitchen are excluded. If you try getting quotes from a number of insurance brokers, they should be able to give you an indication of what they feel the rebuilding cost would be. You can then compare that to the banks figures.

Click to expand...

Its just rebuild cost - I am a FTB and this is the evaluation that the lender came up with as one of the term of mortgage - I did mention it to the bank that its a bit over the top, but their version is that that they don't have any say in it - its up to the evaluation architecht / underwriters etc!

Well, as I said, when I compared quotes from 123.ie for 175k and 250k, there wasn't much of a difference (20 to 30 euros pa)!

bacchus said:

But in the event of total destruction, will the insurance reimburse the real "rebuilding cost" or the "sum" you insured your hosue for?
I think the first one, as otherwise i could buy a house for €300k, insured it for €800k, burn it and just made €500k. A bit too easy...

Click to expand...

If you're under-insured, they will only pay out to that value. In the case of a claim for contents, they pay on a pro-rata basis - the amount of your insurance/total of contents.
If you're over-insured, you've been paying additional premiums for no good. They will only pay out to a maximum of the rebuilding costs.