Bank wants higher rebuild value for insurance.

DubTony

I bought a house in 2006 and at the last insurance renewal I reduced the rebuild valuation to about half of what the house originally cost. It was previously at about 75%.

The bank have told me to bring the reinstatement (rebuild) value back up to that original value which would work out at a rebuild value of about €180 a sq. ft. I spoke to a builder who told me that if the property was destroyed he would do the job for €90 a sq. ft. to include kitchen, bathrooms and floor coverings. Another guy told me he's doing it "these days" for between €80 and €85. I insured at at €115 per sq. ft. + contents.

Does anyone know if I am legally required (as part of a mortgage agreement) to bring this insurance up to the original 4 year old, top of the boom valuation that the bank wants ?

Henry Ford III

I'd say argue your case.

FBD Ins. has a handy calculator online for working out sums assured.

stepbar

DubTony wrote: »

I bought a house in 2006 and at the last insurance renewal I reduced the rebuild valuation to about half of what the house originally cost. It was previously at about 75%.

The bank have told me to bring the reinstatement (rebuild) value back up to that original value which would work out at a rebuild value of about €180 a sq. ft. I spoke to a builder who told me that if the property was destroyed he would do the job for €90 a sq. ft. to include kitchen, bathrooms and floor coverings. Another guy told me he's doing it "these days" for between €80 and €85. I insured at at €115 per sq. ft. + contents.

Does anyone know if I am legally required (as part of a mortgage agreement) to bring this insurance up to the original 4 year old, top of the boom valuation that the bank wants ?

I'm guessing they're using the Society of Chartered Surveyors estimates - http://www.scs.ie/publications/press_releases/press_release_files_10/06-04-10-HouseRebuildingInsurance.pdf

Lots of info on scs.ie

broker2008

A lot of the banks are now looking for higher sums insured, higher than scs site too.

oldyouth

I come across this on a daily basis and have reached the conclusion that Banks and Building Societies haven't got a clue what they are at with regard to sums insured on property insurance. Previously, they wanted to get clients to insure for market value, which took in to account location and now they want to insure for the exposure on their mortgage.

Bottom line is that you can insure as high a figure as you like, but the maximum an insurance company will ever pay, is the amount it will cost to put you back to where you were

bonnamh

Hi
I have a similar story
The first time round, the bank required original (boom) rebuild value and then picked holes in spellings!
Now without even changing insurers on my part, they are requesting details and indemnity and Notice of Interest again.
In all communications they have stated that this is a "a condition of my mortgage", which as it happens is a TRACKER.
As this "requirement" from the bank only started in 2010 for me, I am cynically assuming they are looking for excuses to wriggle out of tracker mortgages
c:)

hucklebuck

I can't blame the banks for making sure the sums insured are adequate. In relation to the rebuilding sum insured don't forget this covers demolition of the buildings, architects and surveyors fees and the cost of rebuilding the house.

All said €180 is a touch steep, I would say €150 is more realistic.

Milk & Honey

If you get an oil spill the site clean up costs can be massive. Insurance should be the higher of market value or rebuild costs to allow for this situation.

hucklebuck

Milk & Honey wrote: »

If you get an oil spill the site clean up costs can be massive. Insurance should be the higher of market value or rebuild costs to allow for this situation.

Oil spillage falls under the burst pipes peril and bears no relevance to the building sum insured

rameire

Milk & Honey wrote: »

If you get an oil spill the site clean up costs can be massive. Insurance should be the higher of market value or rebuild costs to allow for this situation.

and you should not use the market value if it is the higher.
it has nothing to do with reinstatement of the property.

if people are concerned about the reinstatement cost for the insurance or mortgage queries, just get the help of a valuer and get a valuation report done, should cost no more than €150 for a full one.

coylemj

rameire wrote: »

and you should not use the market value if it is the higher.
it has nothing to do with reinstatement of the property.

if people are concerned about the reinstatement cost for the insurance or mortgage queries, just get the help of a valuer and get a valuation report done, should cost no more than €150 for a full one.

Doesn't a valuer just give you the market value of a house? I would have though that a valuer wouldn't have a clue as to demolition and rebuilding costs, that's what surveyors are for.

rameire

the ones I had seen did put in the rebuild cost.
I have seen thousands and they all had the rebuild cost.
maybe it was a requirement for the valuation I had seen,
but if you ask the valuer they will advise if they can or cannot provide.