Rebuild cost Q.

[zoothorn]

Hi chaps,

 

after getting a 'rebuild cost' survey done, I was amazed at the figure. I'd roughly estimate it to be -twice- the value of the property ( in turn a figure -twice- the purchase cost, 6years ago, an extention & work done etc).

 

I can't wrap my head around the rebuild cost, @ £530,000. I would -guesstimate- my property to be worth £250k. It could be more, unlikely less I'd think. So how does this figure come to be?

 

The bottomline, perhaps being my thinking, that the higher this figure.. the higher my insurance premium will be.

 I don't know.

Any help appreciated, zoot.

 

 

 

[joe90]

My initial thought was to raise your premium, my build cost a lot less than your £530k and is a bigger house including an estimate for the labour I put in, does not add up to me either 

[ProDave]

Rebuild cost has to also include demolishing and removing what is left of a ruined building so is always going to be more than the cost of building  it on a bare plot in the first place.  Then there are things like alternative accommodation to pay for etc while it is being rebuilt.

[saveasteading]

It is the worst case, where demolition is not even easy, foundations are removed etc. Plus lots of consultants, and a one-off rebuild.

In reality most insurance jobs are much cheaper.

On the other hand, the land still has value. So the difference between rebuild cost and value is even greater.

 

Under insure at your peril, as any claim will be paid only in part. 

[zoothorn]

Thanks y'all. That clarifies things alot.

One concern I had, with the 530k figure being so high, was that some fresher came to do it (albeit for a RICS approved, & experienced Ch. Surveyor Co, whom I got to survey house at time of purchase). Looked about 30.

 

Then the fact that the invoice I got today from him, was 3x the quote (rectified thankfully.. but a " fresher" mistake it seemed).. & then led me to question this high 530k figure.

 

But if it doesn't seem of concern to you guys, then I can put my concerns to bed. And fwd the survey to my insurance Co; you see the bottomline being, surely, that the higher this 530 figure, the higher my insurance will be. Unless there are 'bands' like tax bands. 
 

Anyway thanks, Zoot.

[Ferdinand]

I haven't mooted with Zoot for a time. Hope you are well !

 

But depending if a smaller number is better for you, I'd consider getting a different quote from another insurance company. Just as a check that the number is in the right ballpark.

 

AIUI, a rebuilding cost survey is unusual.

 

My insurers have always had a number in their computer based on the features of the house, or pulled a number out of the air, or asked me.

 

The rebuilding cost has an impact on your premium, but a relatively small impact. It is like agreeing to a mileage limit on a car insurance - can make a difference but is unlikely to make it half or double.

 

F

[bassanclan]

My bog standard insurance for a 3 bed semi is up to £1m. Insurance (inc contents) is £102 p.a.

[zoothorn]

3 hours ago, Ferdinand said:

I haven't mooted with Zoot for a time. Hope you are well !

 

But depending if a smaller number is better for you, I'd consider getting a different quote from another insurance company. Just as a check that the number is in the right ballpark.

 

AIUI, a rebuilding cost survey is unusual.

 

My insurers have always had a number in their computer based on the features of the house, or pulled a number out of the air, or asked me.

 

The rebuilding cost has an impact on your premium, but a relatively small impact. It is like agreeing to a mileage limit on a car insurance - can make a difference but is unlikely to make it half or double.

 

F

Hi there Ferdinand.

 

To be honest, I haven't got a clue about any of this. All I had was this: a very intelligent retired accountant family friend whose been like a financial advisor who knows a myriad about everything to do with money, advised me very specifically, to go to a Chartered Surveyor & ask for a "rebuild survey, fire related, insurance purposes" (something along those lines, even if the 6 words are round the wrong way). I called my surveyor, gave these 6 words. He understood. Quoted me £100. The survey done, & as a result, I have a document, to give to my insurance company.

 

I think maybe my friend was advising me to have this survey done, after adding an extention 2 years ago now, which I hadn't yet even mentioned to my insurance Co. 50% Laziness & 50% actually I wasn't even aware I needed to have my insurance thing changed, so I've been blissfully unaware. Or naiively unnaware. Or stupidly.
 

Tbh I don't even know what to do with this document. Just email it to them? Explain I need something extra? Or ammended? Anything financial to me, I just do not understand 95% of it ( eg a credit card I cannot understand even have it explained by family or even a bank person. but I don't get it. So I just don't have one!). Insurance as a basic thing, yes I can understand. But if it splits into different guises.. I'm lost.

 

Thanks for reading my spiel, zoot.
 

 

[zoothorn]

3 hours ago, bassanclan said:

My bog standard insurance for a 3 bed semi is up to £1m. Insurance (inc contents) is £102 p.a.

I assume that sort of thing is what I have. Admiral but no idea of 'up to £?' figure.. But mine's £280 p.a. And 2 beds, albeit detached. It just gets paid by dd. I haven't a clue if it's very good or very bad. Less I interact with anything financial.. the better, in my naiive world (IE, dd is heaven-sent to me).

I seem to recall I did 'shop about' online settling on one, in a kind of "Ive no fkn idea, but seems ok" sort of mindset. It could be very bad.

 

Why I have to do this additional survey thing, I can't possibly know. Zoot

[joe90]

I have never had a survey fir house insurance (and I have owned a few) they usually base it on the number of bedrooms  and other rooms! Currently with Direct line for both houses (they are not on comparison websites).

[zoothorn]

51 minutes ago, joe90 said:

I have never had a survey fir house insurance (and I have owned a few) they usually base it on the number of bedrooms  and other rooms! Currently with Direct line for both houses (they are not on comparison websites).

Well I'm confused as to why I have had to have this done then. Or if I had to do it. 
 

Does it imply that if mine was ruined by fire ( something I am worried about tbh, arson by nasty locals) that I could have mine rebuilt under insurance, whereby you couldn't? A rhetorical Q/ god only knows.

[joe90]

57 minutes ago, zoothorn said:

that I could have mine rebuilt under insurance, whereby you couldn't?

No, mine is fully insured (£1m I believe) .

[Ferdinand]

1 hour ago, zoothorn said:

Well I'm confused as to why I have had to have this done then. Or if I had to do it. 
 

Does it imply that if mine was ruined by fire ( something I am worried about tbh, arson by nasty locals) that I could have mine rebuilt under insurance, whereby you couldn't? A rhetorical Q/ god only knows.

 

It may just be that it came up as one of the small number they do every year, or they think it is an unusual house.

 

I wouldn't worry about that unless you approach 3 companies and they *all* demand surveys 🙂 .

[zoothorn]

1 hour ago, Ferdinand said:

 

It may just be that it came up as one of the small number they do every year, or they think it is an unusual house.

 

I wouldn't worry about that unless you approach 3 companies and they *all* demand surveys 🙂 .

Hi again Ferdinand,

 

yes I think I can perhaps just put this down to naivity, & thankfully not the £360 they invoiced me for (!).. but £120. Still irks me if I didn't need it doing, but hey I must crack on.

 

Actually my insurance Co, Admiral, didn't ask for it/ my family friend persuaded me.. & he's invariably correct on anything financial. He is 93 though! Sharp as ever, tho, but perhaps an 'old school' redundant way now.

 

Thanks chaps, spurs me on to shop around again. If my brain can bear it.

 

Zoot.

 

 

 

 

[saveasteading]

If a house is 'standard' then there are formulae for rebuild cost based on area.

Try various online insurers (some use the  formula way, some don't) and see what their costing comes to.

If your house is a  one-off then perhaps yours has some particular costs.

[MJamesW]

Most insurers are using the BCIS calculator these days, due to worries regarding the rate of construction inflation and underinsurance . This is in my mind a good thing as it aligns with lender valuation and you dont have problems with under or over insurance you have documented evidence . It has absolutely nothing to do with larger premiums and commissions. We can all build a house cheaper than the BCIS report suggests, but the insurance as stated does cover demolition and site clearance. The insurance company would also have to employ a contractor who would charge full value on the build

 

What is actually more common is underinsurance as it makes the premium look more competitively priced to those offering BCIS valuations. This will cause problems for lenders and vigilant lawyers 

 

Always look for professional advice its a complex product  that should not be bought on price