Christian and Beccy

iTrader: (14)

Why is it that if you insure your home, you insure it for the full market value?

What's the worst thing that could happen that the insurer may have to pay out for? The house be destroyed and need rebuilding? You will still have the land though, won't you? It's the land thats worth the major part of the overall value, isn't it?

Is it just another way for them to win out of you?

Our new mortgage provider has asked that our buildings insurance be the equivalent of the mortgage offer, but we don't see why our insurance needs to exceed the value of the house itself. Not sure how it is calculated though.

Any thoughts on this?

collierm

Depends on the mortgage lender. Nationwide said to us you need cover, but the level depends on you, we just want to see a policy????

Halifax wanted us insured to the hilt, bloody insurance costs would have been more than the monthly mortgage payments.

Cheers

Matt

focusv8

The rebuilding cost can exceed the market value including the land.
Remember there is demolition and clearing site.
The new house will have to meet current building regs etc, and will probably end up with a higher market value than the original.
There are architects fees, and planning application costs.
Removal of gas electric and water services and then re-enstatemnet of them.
It can be expensive to build a one off on a plot with little room to store materials etc.
The insurer will probably have pay for temp. accomodation for you for up to a year plus removal cost both ways.

I bought a house years ago that had structural damage and the insurance company had paid the owner enough to buy another house as it was cheaper.

.

Dan

You don't mate, or at least you shouldn't, you insure it for the rebuild cost of the property!

Again no mate, although yes you have the land if the property was totally destroyed it's still the property that holds the real value

Basically mate from what your saying here your mortgage exceeds the value of the property? So affectively your in 'negative-equity', which is probably why they want you to insure it for a higher amount

If you like give me a call at work tomorrow and we'll get something sorted out, 95% of the time i'll be able to get it cheaper for you or if not at worst can give you some advice on the situation....

I'll PM you the number, ring me if your interested