Home house insurance query

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majee

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we've recently applied for a mortgage top up as we are doing a lot of renovation work on the house. The bank insisted as part of the application that the house be valued and gave us the name of a guy they use. So far so good. The guy came to the house and valued the house at €230k as it was (works are ongoing at the moment) and when the works were complete he reckoned it'd be worth €265k on the open market.
I just got an email from the bank saying that our current house insurance may have to be increased from it's current €220k to €350k as suggested by the guy who came to value the house. I queried this with the bank guy we are dealing with for the loan and he said that that would be right - €220k to rebuild the house and the rest (€130k) for clearing the site etc etc. It's a terraced house by the way.
My understanding is that your house insurance should be based on the rebuilding costs of your home (which I estimated from the quantity surveyers website) and not the value of it on the open market plus the cost of clearing the site etc. Am I going insane or are they completely wrong?
 
Yes it should be rebuilding costs plus site clearance costs but he didn't make it market value plus site or it would have been 265k + 130k (which sounds a lot for clearing a site). He obviously estimated rebuild cost at 220k, what does the surveyors site say?

Terraced houses are always expensive due the the possiblity of damage to two adjoining houses in for example a fire.
 
majee said:
we've recently applied for a mortgage top up as we are doing a lot of renovation work on the house. The bank insisted as part of the application that the house be valued and gave us the name of a guy they use. So far so good. The guy came to the house and valued the house at €230k as it was (works are ongoing at the moment) and when the works were complete he reckoned it'd be worth €265k on the open market.
I just got an email from the bank saying that our current house insurance may have to be increased from it's current €220k to €350k as suggested by the guy who came to value the house. I queried this with the bank guy we are dealing with for the loan and he said that that would be right - €220k to rebuild the house and the rest (€130k) for clearing the site etc etc. It's a terraced house by the way.
My understanding is that your house insurance should be based on the rebuilding costs of your home (which I estimated from the quantity surveyers website) and not the value of it on the open market plus the cost of clearing the site etc. Am I going insane or are they completely wrong?
Click to expand...

You are 100% correct. The SCSI index (which i would think you are referring) includes for site clearance. you should fill in the info on the website and print out the result and give it to the bank.

I have always been dubious about bank valuations as just because you can value a house does not mean you have a clue what it costs to rebuild one. This was evident in the boom when valuers were putting the same value in for the value of the house and the cost of the build.
 
wbbs said:
Terraced houses are always expensive due the the possiblity of damage to two adjoining houses in for example a fire.
Click to expand...


I dont know what you base this on but it simply has no basis.

In case of a fire there is no cover in place for adjoining properties. You insure yours and they insure theirs. There is law governing this issue and if your house accidentially goes on fire and burns down the street you are not liable for the rebuild of the other properties, they must claim off their own insurance.

If there is neglegence or malicious damage then you could be liable but this falls under the public liability section of your insurance and is not linked to your building value.

A terraced property is the cheapest possible property to rebuild without questions
 
Obviously just insurance company sales rubbish so, used to sell house insurance and we were always told that was the reason for higher than expected figures for terraced and semi detached houses, never questioned it as it sounded logical.
 
You say it's a terraced house. Is it an older house? This is from the SCSI website
" The figures shown in the table are a MINIMUM base cost guide for your house
insurance.
2. The figures are based on estate-type houses built in the Dublin, Cork, Galway,
Waterford and Limerick areas since the 1960s.
They exclude: (a) properties with more than two storeys or with basements or
habitable attics; (b) ‘one-off’ houses with special design features or period houses;"
 
emeralds said:
You say it's a terraced house. Is it an older house? This is from the SCSI website
" The figures shown in the table are a MINIMUM base cost guide for your house
insurance.
2. The figures are based on estate-type houses built in the Dublin, Cork, Galway,
Waterford and Limerick areas since the 1960s.
They exclude: (a) properties with more than two storeys or with basements or
habitable attics; (b) ‘one-off’ houses with special design features or period houses;"
Click to expand...

Any changes to the above will not account for a €130k increase
 
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