How much does buildings insurance cost?
Discussion
I know, how long is a piece is string, right? But I'm just curious. Is there a formula which gives a roughly accurate idea? For example, if a £200k house costs £200, is it reasonable to think that buildings insurance is one thousandth of the value of the house, so a £1million house would cost £1,000 to insure?
I'm really just indulging myself having looked at some of those Omaze houses and wondered what it would cost to live in them. It looks like the buildings insurance and council tax alone could amount to £10k per year if my theory is right!
I'm really just indulging myself having looked at some of those Omaze houses and wondered what it would cost to live in them. It looks like the buildings insurance and council tax alone could amount to £10k per year if my theory is right!
Value and the reinstatement cost are completely different things so there is no automatic relationship between the two in terms of the insurance premium.
As an extreme example I recently valued (for reinstatement purposes) a GII* property in an economically 'poor' location at over £5m, whereas I would guess the market value to be less than £1m
As an extreme example I recently valued (for reinstatement purposes) a GII* property in an economically 'poor' location at over £5m, whereas I would guess the market value to be less than £1m
Also terraces can be expensive, because the rebuild around neighbouring properties would be a lot more costly.
Ie, knocking down a detached bungalow vs a modern 3 storey town house terrace and then rebuilding it would be many factors more in cost.
Iirc our house was £375 at the time but rebuild was £500, for a new build.
Ie, knocking down a detached bungalow vs a modern 3 storey town house terrace and then rebuilding it would be many factors more in cost.
Iirc our house was £375 at the time but rebuild was £500, for a new build.
I've just built my house myself at a cost of around £300K including buying the plot. I object to paying insurance premiums based on a £750K to £1M rebuild cost when, whatever disaster befell us we'd, at very least, still have a serviced plot.
I don't think any insurance company would be interested in my logic however.
I don't think any insurance company would be interested in my logic however.
Desiderata said:
I've just built my house myself at a cost of around £300K including buying the plot. I object to paying insurance premiums based on a £750K to £1M rebuild cost when, whatever disaster befell us we'd, at very least, still have a serviced plot.
I don't think any insurance company would be interested in my logic however.
Problem is should the worst happen and you are not able to rebuild it yourself for whatever reason then you wouldn't want to then find out that your " insured " quantum of £300k is viewed by any Insurer as underinsurance against their (say ) recommended rebuild figure of say £750k and they then" apply average " to the settlement.I don't think any insurance company would be interested in my logic however.
Insuring to then 40% of value would mean any settlement would be on the same basis ie you wouldn't get £300k but £ 120k.
Desiderata said:
I've just built my house myself at a cost of around £300K including buying the plot. I object to paying insurance premiums based on a £750K to £1M rebuild cost when, whatever disaster befell us we'd, at very least, still have a serviced plot.
I don't think any insurance company would be interested in my logic however.
Yet if the flat down the street has a modest fire, the rebuild cost can spiral into the whole block of flats...I don't think any insurance company would be interested in my logic however.
To add some balance - we had an insurance claim a few years back after a tree landed on part of the house.
I expected quotes to be well under £5k as it really wasn't that bad but they were all well over £20k. The insurance loss adjuster guy didn't bat an eyelid and signed off the "cheapest" quote without much thought. The guys were on site for a long time but there really wasn't much work going on and we're definitely padding it out - I came home one day to find them sleeping off their lunch in the sunshine!
As soon as trades know it's an insurance job their eyes almost light up so can well imagine a full rebuild after a house fire or something to be ridiculously expensive, especially with someone else fully managing the build. Completely different costs involved to a typical self build.
I expected quotes to be well under £5k as it really wasn't that bad but they were all well over £20k. The insurance loss adjuster guy didn't bat an eyelid and signed off the "cheapest" quote without much thought. The guys were on site for a long time but there really wasn't much work going on and we're definitely padding it out - I came home one day to find them sleeping off their lunch in the sunshine!
As soon as trades know it's an insurance job their eyes almost light up so can well imagine a full rebuild after a house fire or something to be ridiculously expensive, especially with someone else fully managing the build. Completely different costs involved to a typical self build.
alscar said:
Desiderata said:
I've just built my house myself at a cost of around £300K including buying the plot. I object to paying insurance premiums based on a £750K to £1M rebuild cost when, whatever disaster befell us we'd, at very least, still have a serviced plot.
I don't think any insurance company would be interested in my logic however.
Problem is should the worst happen and you are not able to rebuild it yourself for whatever reason then you wouldn't want to then find out that your " insured " quantum of £300k is viewed by any Insurer as underinsurance against their (say ) recommended rebuild figure of say £750k and they then" apply average " to the settlement.I don't think any insurance company would be interested in my logic however.
Insuring to then 40% of value would mean any settlement would be on the same basis ie you wouldn't get £300k but £ 120k.
Everyone knows what it means, and it shouldn’t be possible to under-insure.
But I’d argue that paying a proper surveyor £200 ish for a proper rebuild cost valuation is more useful than an insurer armchair calculation.
I’ve just called my insurer, current place was £375k, rebuild £500k new build in 2021.
Currently they have rebuild at £725k!11!!!
New place their calculator came out at £975k for new place, we’re buying at £650k.
I was messing on check a trade a month ago and rebuild cost calc there for a 2000sqft detached bungalow plus demolition etc etc was about £450k for nice stuff, maybe £600k at luxury spec.
Insurers are imo just going crazy because trades *went* crazy, so they’re just passing the trades risk on to the consumer.
Fingers crossed we have a big recession and all this stupid greedy behaviour disappears because it’s just feeding trolls.
I had a Harrogate roofer out to give a quote t’other week. £1350 ish.
Another roofer from Wakefield laughed at that quote, saying it was like another world out where I am.
Clearly piss taking has set in and where people have been willing to pay silly prices trades have indulged them.
Mr Whippy said:
alscar said:
Desiderata said:
I've just built my house myself at a cost of around £300K including buying the plot. I object to paying insurance premiums based on a £750K to £1M rebuild cost when, whatever disaster befell us we'd, at very least, still have a serviced plot.
I don't think any insurance company would be interested in my logic however.
Problem is should the worst happen and you are not able to rebuild it yourself for whatever reason then you wouldn't want to then find out that your " insured " quantum of £300k is viewed by any Insurer as underinsurance against their (say ) recommended rebuild figure of say £750k and they then" apply average " to the settlement.I don't think any insurance company would be interested in my logic however.
Insuring to then 40% of value would mean any settlement would be on the same basis ie you wouldn't get £300k but £ 120k.
Everyone knows what it means, and it shouldn’t be possible to under-insure.
But I’d argue that paying a proper surveyor £200 ish for a proper rebuild cost valuation is more useful than an insurer armchair calculation.
I’ve just called my insurer, current place was £375k, rebuild £500k new build in 2021.
Currently they have rebuild at £725k!11!!!
New place their calculator came out at £975k for new place, we’re buying at £650k.
I was messing on check a trade a month ago and rebuild cost calc there for a 2000sqft detached bungalow plus demolition etc etc was about £450k for nice stuff, maybe £600k at luxury spec.
Insurers are imo just going crazy because trades *went* crazy, so they’re just passing the trades risk on to the consumer.
Fingers crossed we have a big recession and all this stupid greedy behaviour disappears because it’s just feeding trolls.
I had a Harrogate roofer out to give a quote t’other week. £1350 ish.
Another roofer from Wakefield laughed at that quote, saying it was like another world out where I am.
Clearly piss taking has set in and where people have been willing to pay silly prices trades have indulged them.
Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
alscar said:
"
Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
Which is why many mainstream insurers will automatically increase the maximum sum insured. This ensures that the consumer isn't caught out by "average"Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
TownIdiot said:
alscar said:
"
Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
Which is why many mainstream insurers will automatically increase the maximum sum insured. This ensures that the consumer isn't caught out by "average"Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
It could have all just become a bit of a free money exercise for insurers at this point which isn't great.
TownIdiot said:
alscar said:
"
Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
Which is why many mainstream insurers will automatically increase the maximum sum insured. This ensures that the consumer isn't caught out by "average"Don't disagree which is why that rebuild cost valuation is /can be so important -whether the underlying numbers that make that up are" fair "is as you say something else.
However the onus is on the Insured and not the Insurer to ensure Insurance to value.
However doesn't change the onus and where any aspect isn't standard as already commented on by others such as Listed building's and the like.
alscar said:
Absolutely and also where a " guaranteed replacement cost policy " is also available.
However doesn't change the onus and where any aspect isn't standard as already commented on by others such as Listed building's and the like.
since the insurance act of (i think) 2015 there has been a change of onus in that the insurer can only rely on the answers to questions that have been asked. The concept of "Uberrima Fides" is no more when it comes to consumer insurance contracts.However doesn't change the onus and where any aspect isn't standard as already commented on by others such as Listed building's and the like.
TownIdiot said:
alscar said:
Absolutely and also where a " guaranteed replacement cost policy " is also available.
However doesn't change the onus and where any aspect isn't standard as already commented on by others such as Listed building's and the like.
since the insurance act of (i think) 2015 there has been a change of onus in that the insurer can only rely on the answers to questions that have been asked. The concept of "Uberrima Fides" is no more when it comes to consumer insurance contracts.However doesn't change the onus and where any aspect isn't standard as already commented on by others such as Listed building's and the like.
I accept this may not apply for the vast majority of houses where "grc " will cover off any potential of under insurance so to a large extent this expectation is possibly moot.
When my House Insurance came up for renewal last year ( Listed G2 ) the Insurer ( and the Broker ) said they required an independent valuation first to ensure I wasn't under insured.
Whatever the case though I personally still wouldn't want to run the risk of being under insured.
Mr Whippy said:
I wonder how much comeback you'd have if a QS gives a rebuild value that undervalues it relative to the insurers expectations?
It could have all just become a bit of a free money exercise for insurers at this point which isn't great.
Interesting question although I would assume that given Insurers would issue the policy based on the QS valuation, should said Sum Insured prove to be inadequate the QS's Professional Liability Insurance may be called upon ? That would be one messy situation to find oneself in though !It could have all just become a bit of a free money exercise for insurers at this point which isn't great.
In reality I would guess that the QS's figure already contains a degree of caution /contingency.
Given too the Insured usually has to pay for such a valuation.
We have a large - just "self" built house and insuring it was surprisingly tricky.
As above it it based on rebuild value. The mainstream insurers tend to withered away once the rebuild value goes much over £1m. For us none would quote.
You then end up with several specialist brokers.
We agreed a premium (£3500) and the insurer then instructs a firm of surveyors for a semi desktop rebuild valuation. This is Google earth ( not there only just built ) the planning docs , send a load of pics and about half an hour on the phone re the spec etc.
The upshot was the rebuild was more than I had just paid for it so the premium went up another £800 to £4300.
The frustrating thing is that rebuild includes things like landscaping and the argument that the house burning down won't impact the landscaping gets you nowhere. Likewise my costs included levelling the site which is an expensive exercise that would not need repeating etc.
The market is very limited so the " well I will go elsewhere then " is not really much of an option.
This was an honest surprise to me as a few million to a. Insurer is pocket change , the odds of a total loss claim are low and the risk of fire etc is well known so why the value make a difference and most won't cover it is a mystery.
As above it it based on rebuild value. The mainstream insurers tend to withered away once the rebuild value goes much over £1m. For us none would quote.
You then end up with several specialist brokers.
We agreed a premium (£3500) and the insurer then instructs a firm of surveyors for a semi desktop rebuild valuation. This is Google earth ( not there only just built ) the planning docs , send a load of pics and about half an hour on the phone re the spec etc.
The upshot was the rebuild was more than I had just paid for it so the premium went up another £800 to £4300.
The frustrating thing is that rebuild includes things like landscaping and the argument that the house burning down won't impact the landscaping gets you nowhere. Likewise my costs included levelling the site which is an expensive exercise that would not need repeating etc.
The market is very limited so the " well I will go elsewhere then " is not really much of an option.
This was an honest surprise to me as a few million to a. Insurer is pocket change , the odds of a total loss claim are low and the risk of fire etc is well known so why the value make a difference and most won't cover it is a mystery.
Gassing Station | Homes, Gardens and DIY | Top of Page | What's New | My Stuff