Home Home Insurance Rebuild Costs- Urgent query!

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zmm

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Hi we have a 4 bedroom dormer in Roscommon, current mortgage is €130K approx, original build cost 6 years ago was €122K. We insured for €150,000 rebuild cost which we felt was adequate in the current depressed building market, also my brother-in-law is currently building a large 4 bedroom 2 storey house just down the road from us for €160,000. However, the bank queried this insurance amount and felt it was inadequate- they are working from tables that are not relevant to Roscommon though and feature grossly inflated rebuild prices. I checked with scs.ie website also but they only provide quotes for Galway, Cork, Dublin, Limerick, all of which are much more expensive rebuilds than for Roscommon! I also reverted to insurer but they could/would not tell us if insurance was adequate. Bank wants us to write a letter to them asap stating we are happy with current level of insurance.
Queries:
Does anyone know where we can find out what an adequate rebuild cost relevant to our county is?
Do we have to send this letter to the bank, don't like the idea of them forcing us to write letters just to cover them!
 
You will have to ring a QS or take an educated guess baxed on one of the other counties!
 
150K does seem a bit light.

To compare it to your original build cost, or your BiLs build cost, make sure you are comparing like with like.

The question is

If your house burnt to the ground, could you rebuild it to the same spec for 150K, including the cost of knocking down and removing the shell, architects fees and including all wooden floors, fitted kitchens, fitted wardrobes, light fittings, painting
 
In accordance with the scs index the following is the calculation you need to do to confirm your insured value for 2011:

Detached property in Galway area (scs basis is regional) total sq ft x €121 per ft2
Add for garage
Add for higher than average kitchen fittings
Add for built in wardrobes etc
Add for special finishes (eg hardwood timber floors)
Add for rebuilding any outbuildings
Add for rebuilding fences/walls
Add for any other items which are not covered (eg fire alarm)
Total you should be insuring is the addition of these figures

As stated by huskerdu the rebuilt includes for demolition, and profesisonal fees etc and is not simply the cost of build.
 
thanks

Thanks very much to everyone for your help on that, much appreciated. My husband rang a quantity surveyor - he said he thinks to be safe alright we should go up to €160K/€165K, rang the insurers nononsense.ie they won't let us increase the amount we are insured by until our insurance for the year is up! So we have to decide now whether to take a chance or cancel that insurance and get another for €165K I suppose. Decisions decisions!
 
Hi Zmmm. I am a Chartered Quantity Surveyor so I might be able to help you. As the other posters have said you can refer to the scs rebuilding index. www.scs.ie

However, I think the SCS figures are a bit high. Remember, the higher you value the rebuilding costs the more you pay in premiums. In the event that your house is damaged the insurance company will disregard the value they have on the house anyway. Remember, the rebuilding cost is taken from the ground floor up and is not based on the value of your home.
 
Thanks Patrick2008. I suppose in the end it comes down to what you are willing to take a chance on and the insurance companies will never lose anyway!
 
zmm said:
rang the insurers nononsense.ie they won't let us increase the amount we are insured by until our insurance for the year is up!
Click to expand...

So much for their name ;) and their tv/radio adverts mocking their competitors' inflexibilities :p
 
Wouldn't it be brilliant if the insurers simply stated what the maximum payout would be. But they don't do that of course as people would be able to only pay for the insurance they actually receive. Insurers would prefer for people to over-insure, and so they make quite silly excuses as to why they cannot release maximum payout values now.

it seems strange to me that site clearance is included as part of 'rebuilding'. What if there is a nuclear accident, requiring a very expensive and sophisicated cleanup.. your 200K would be gone very quickly. No-one is going to be insured for that eventuality. People might say I'm being silly.. but how much does it cost to remove a three bedroom house from a site?, does anyone know?, and if not, how is the OP supposed to know what to insure for? What if absestos was used in the construction... how much would that cost to remove? How is the OP supposed to know that?
 
This is my issue as well no one actually seems to really know what the costs would be. As I said we just estimated from my brother in laws build- just a mile or two down the road, similar size rural site and a larger sq footage house is costing them €160,000 including foundation etc. So my husband reckons we should be well covered for €150,000 for a smaller dormer and of course the foundation is already laid. I wish Eddie Hobbs or someone would tackle this subject, it seems to be a silent rip off going on. And yes, nononsense are surprisingly inflexible and if I had time and energy I'd ring them again about it. I'll wait till I'm in a bad mood!
 
zmm said:
This is my issue as well no one actually seems to really know what the costs would be. As I said we just estimated from my brother in laws build- just a mile or two down the road, similar size rural site and a larger sq footage house is costing them €160,000 including foundation etc. So my husband reckons we should be well covered for €150,000 for a smaller dormer and of course the foundation is already laid. I wish Eddie Hobbs or someone would tackle this subject, it seems to be a silent rip off going on. And yes, nononsense are surprisingly inflexible and if I had time and energy I'd ring them again about it. I'll wait till I'm in a bad mood!
Click to expand...

Nobody will know what the precise rebuild will be until such time as a detailed quotation is obtained for the demolition and rebuild costs are precisely determined. Establishing the value at risk for insurance purposes in generally not a scientific procedure. The rates given by the SCS are a guide only. It is for this reason that I would always advise to err on the side of caution and if anything, slightly overinsure. Yes, everybody will tell you that they got a great cheap builder/handyman/direct labour to build the house and it cost them only €80 per sq ft. However, when the house has been burned down, they will have an assessor/engineer/architect advising that the house cannot possibly be rebuilt for less than €180 per sq ft. When disaster strikes, it is very comforting to know that there is enough cover in place and short cuts will not have to be taken in rebuilding.

As a matter of interest....why do you think you are being ripped off and who is that is ripping you off?
 
The refusal of insurance companies to release maximum payouts is a rip off. (someones elses words, not mine), especially in relation to car insurance. If the book value of a car is X, why do the insurance companies keep that to themselves, while allowing people to over-insure for X + 20%? The insurance companies know that they will never pay out that amount, so they are knowingly overcharging, ergo.. a rip.
 
Completely different situation to rebuilding costs! With motor insurers 99% of companies do not charge a premium based on the value unless it is in excess of €50,000. Therefore whether your car was 20k when you bought and is now worth 5k, its not going to make a difference!
 
Hi Claimsman
I appreciate your points and well made. It just frustrates me that we are trying to get a proper amount for the insurance but there are no guidelines for the midlands/west, particularly rural areas. Everyone directs you to the scs website but its amounts are far in excess of what realistically is the build price here- they are based on city rebuilds as far as I can see. I did ask the insurance company themselves for guidance but they couldn't give any. I do agree it is better to err on the side of caution but now nononsense won't let us increase the amount. Anyway I am going to try and talk to them again or we may have to cancel that policy and go with a different insurer for a larger amount - probably the €165,000. I just wish there was more guidance out there for people not living in the main centres of population who don't want to either grossly over or under insure their properties.
Anyway I do appreciate the points everyone has made and for the help on the issue.
 
Hello a good ending to the saga. I just rang Nononsense again and got through to a much more helpful person and there was no issue in raising the rebuild insurance to €165,000 for €40 extra. So my apologies to nononsense for getting annoyed with them. Mind you, it is a cautionary tale in terms of who you get through to in these call centres. The person I spoke to today was wondering if I could remember the name of the original person I spoke to but of course I couldn't. I have had this issue before with banks and insurers- the flexibility on an issue can vary depending on who you get on the phone! Anyway thanks nononsense and we are now, finally, sorted!!!!!
 
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