Calculating rebuild cost for insurance.

[epsilonGreedy]

I am getting a mixed message from Protek insurance about rebuild cost.

 

My initial thought was that it is extremely unlikely a site catastrophe would simultaneously wipe out my service connections, drainage or footings hence I can live with the risk of not insuring the first £25k of rebuild costs. So if my total disaster (asteroid impact) rebuild costs were £200k I could sleep soundly with £175k of rebuild cover.

 

The woman manning the help line at Protek initially challenged this view and said I would be under-insured. I think she meant that if I claimed £10k for a weather related roof incident I would only get £10k minus 12.5% which is the relative degree of under-insurance on total rebuild costs. Later in the same conversation she reversed that position.

 

She also said a pro rebuild would be subject to VAT which needs to be factored in, surely this would be reclaimable if disaster struck prior to a completion certificate?  

[ProDave]

Rebuild cost has to allow a cost for demolition and clearance of the site in the even of the building so badly damages it has to be rebuilt, so add back on what you have taken off and you won't be far out.

[newhome]

6 minutes ago, ProDave said:

Rebuild cost has to allow a cost for demolition and clearance of the site in the even of the building so badly damages it has to be rebuilt, so add back on what you have taken off and you won't be far out.

 

+1. 

[lizzie]

+2

[epsilonGreedy]

25 minutes ago, ProDave said:

Rebuild cost has to allow a cost for demolition and clearance of the site in the even of the building so badly damages it has to be rebuilt, so add back on what you have taken off and you won't be far out.

 

 

Ok will do re. demolition costs.

 

Just spoke Mark at Protek who clarified some things. The advice on VAT covers multiple site insurance scenarios such as renovation where VAT is not reclaimable. In my case the demolition and some rebuild costs would include non reclaimable VAT even for a self build.

 

Mark's principal point is that if my rebuild costs were significantly understated then my whole site insurance cover could be deemed to be under insured.

 

I will rerun the quote for £1500 per sqm rebuild costs and no percentage taken off for below ground indestructibles.

[Temp]

As I understand it repairs (for example after a flood or storm that rips off the roof) are generally liable for VAT that can't be reclaimed by anyone. The only way VAT could be reclaimed is if the house was so badly damaged it had to be demolished and rebuilt.