BOI Mortgages insisting I over-insure?

Gunther_Gloop

Following all advice I've heard recently, when Bank of Ireland raised their home insurance premium by around €200 I decided to re-evaluate my re-build costs and found they were around €200,000 instead of the €254,000 we had previously insured the house for.

So I asked for a re-quote and they gave it (over the phone). But it was still fairly pathetic, so I shopped around and found it cheaper with FBD -around €300 cheaper.

So I went with FBD and the switch-over was the start of this month.

Today I got a letter from Bank Of Ireland Mortgages saying they are in receipt of an FBD schedule in relation to my home insurance and "we would note that the building sum insured amounts to €200,000. The insurance value obtained at the inception of the loan indicated a reinstatement value of €253,948.

"We would appreciate therefore if you would contact your broker or insurance Company directly and request them to forward an amended schedule to us noting the increase in cover to a minimum of €253,948.

"On receipt of the above, we will then be in a position to update our files."

...Like, er, what is all that about??

For the record, our mortage is currently around €80,000 or less. No payment problems to date. Tracker. Rebuild costs are currently around €200,000. So why is BOI telling me to get it upped to €254,000? ...and what if I don't?

I will ring them tomorrow and try to figure it out with them, but some consumer advice about (possibly) why this is happening and what they can/ can't do -and what I can/can't do would be appreciated.

TheDriver

think I had this too, unless you professionally revalue, you must insure it for the stated rebuild cost. Also if it burnt, and you aren't insured enough, you can't rebuild and hence they have no assets to charge against the mortgage.

Gunther_Gloop

Thanks for the reply. That would kind of make sense, except everything I've heard says that the rebuild cost has nothing to do with the overall value of the property, so why should it need to be revalued?
But also, the amount of €200,000 was given when I rang BOI telling them I want a premium reduction due to the lower build cost. They asked for property type/ description and assigned that value on it for me.

Later I got a quote from FBD for the same total.

...I'll ring them later today and see what more I can find out I guess.

Melendez

This post has been deleted.

Gunther_Gloop

Thanks Melendez. I wouldn't mind paying for €250,000 if that's the rebuild price, but we were told €200,000 by BOI home insurance themselves when we asked for a re-quote. I doubt I'd have gotten this letter if we had stuck with them after. I'd prefer not to over-pay.

...I have since rung BOI Mortgages. It took a while to explain why I was ringing (it was a call-centre) but finally I was told I need a written valuation. Apparently there's a way to do it online via the Society of Chartered Surveyors of Ireland website (scsi.ie ?) but if it is it's well hidden.

A printout of the results of that will do for them.

I don't suppose anyone here knows where to find this online rebuild valuation thingy?

Riskymove

How come BOI knew about your home insurance?

My bank never ask me for a copy of renewal or ask who I am insured with

Gunther_Gloop

I don't know. Maybe it's because we moved from BOI insurance to another.

It certainly seems like they're being over-diligent in this case. Well I don't mind their letter if the property does turn out to be under-insured (although again the figure of €200,000 came from BOI Insurance), but otherwise it has nothing to do with them as far as I can see. Are they just having sour grapes?

...That link in scsi.ie seems well buried. Haven't found it yet! Maybe I'm going blind..

coolabula

Gunther_Gloop wrote: »

Thanks Melendez. I wouldn't mind paying for €250,000 if that's the rebuild price, but we were told €200,000 by BOI home insurance themselves when we asked for a re-quote. I doubt I'd have gotten this letter if we had stuck with them after. I'd prefer not to over-pay.

...I have since rung BOI Mortgages. It took a while to explain why I was ringing (it was a call-centre) but finally I was told I need a written valuation. Apparently there's a way to do it online via the Society of Chartered Surveyors of Ireland website (scsi.ie ?) but if it is it's well hidden.

A printout of the results of that will do for them.

I don't suppose anyone here knows where to find this online rebuild valuation thingy?

I just went on the scsi.ie site and in the search box on top, typed in "rebuilding costs"
There are quite a few results, the 2nd one is a document which should give you all the details your looking for

ScouseMouse

One of the banks tried this with my brother a while back and they got into an arguement about the rebuild costs.

They dropped it when he mentioned he was a Quantity Surveyor and was contracts manager for one of the (then) biggest builders in the state.

That shut them up !

borderlinemeath

They can't insist, they have no grounds to insist. They can imply that you must adhere to their schedule but at the end of the day they are only looking out for their own best interests.

It's something that the banks have been trying to make mortgage holders do to a/ protect their own interests if there is a substantial insurance claim and b/ if the policy is through the bank - to get as much money out of the consumer as possible.

I have had a mortgage since 2002 and have never had it with the issuing bank. I have independently secured home insurance through various insurers through a broker and have always tailored the rebuild costs to reflect market prices. I have been contacted numerous times by my mortgage company asking would I like to switch to their insurance for a discounted introductory premium but it's always more expensive then my broker can get and I just wouldn't want to anyway.

dudara

Moved to Banking & Insurance & Pensions

dudara

uberwolf

A few people seem confused here.

The bank is secured on the property. They require insurance, as an ongoing condition of the loan, which will cover the cost of replacing that house in the event that it is damaged / destroyed. Or else they're leaving themselves open to being secured on a field, a field with clearance costs and public liability issues.

The OP is well within his rights to seek to vary the level of his insurance to reflect the most up to date cost of reinstating his house / the banks security.
The bank is well within their rights to require evidence that the latest level of insurance reflects the latest cost of reinstatement.

Nothing to do with contents, etc. That's the OP's issue.

oldyouth

I've commented on this on a good few threads OP. Bottom line is that you are correct in what you want to do but Banks know nothing about reinstatement sum insured. Your mortgage will contain a condition to do as they say, so grit your teeth & take it from behind. They are wrong but it is easier on you in the long run

Gunther_Gloop

Oops -I thought I replied earlier but find I never clicked the submit button. Here's the latest:

coolabula wrote: »

I just went on the scsi.ie site and in the search box on top, typed in "rebuilding costs".
There are quite a few results, the 2nd one is a document which should give you all the details your looking for

I'm pretty sure I did "rebuild cost" as well as a few others, but couldn't find that link. Clearly you're a better person than I.

Thanks.

...From a rough appraisal of that file I think maybe our house is undervalued. Possibly. I'll give FBD a ring in the morning and see how much extra it will be. After that I'll get me measuring tape out if it turns out to be a lot extra.

Thanks all for the help. Turns out BOI may have been doing me a kind of a favour afterall (even if they are the ones who gave the figure of 200,000 in the first place).