Silly persons

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Silly persons

Postby keith » Mon Jan 20, 2014 7:58 pm

A friend of a friend decided last year to insure his house for sale value not rebuild value - After the recent floods he's had to get the insurance people in as his house was flooded to a depth of 15 inches.
This means that he has a significant insurance claim, and lo the insurance company are saying he's under insured so will only be paying 66% of the costs and he has to find the rest - fortunately he was fully covered on contents, but he's going to have to find about £10,000 and to think he managed to save about £100 on the policy.

an acquaintance had £20,000 of contents cover I'd told him several times that he was well under insured, but he wouldn't listen again he's been flooded and the insurers says he's getting 1/3 of what he claimed.

It all goes to show that you would probably be better off over insuring and paying £50 or £100 more than under insuring and saving £50.

Just look around you now, laptop or iPad £400, TV £400, Sky box £200 ( thats what sky charge for a replacement ), BB router £50, Books, pictures, webcam, digital Camera ( My DSLR would cost £700 to replace and I have £2000 in lenses )

and don't even start on clothes/Shoes - I have shoes that would cost £100 or more a pair to replace, Shirts at £50 plus Each
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Re: Silly persons

Postby Steve Griff » Mon Jan 20, 2014 8:01 pm

Shirts at £50ea FFS that would cover my entire wardrob, you should try shopping as Georges :)
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Re: Silly persons

Postby Nick » Mon Jan 20, 2014 8:12 pm

He is very unlucky - normally rebuild value is less than sale value.
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Re: Silly persons

Postby Jo King » Mon Jan 20, 2014 8:26 pm

There must be many people in that situation. If you don't have a mortgage then how does the average person in the street estimate the rebuild value? - not easy for most and Insurers won't help you on this. How many would get a Valuer in to make an accurate rebuild value? More and more Insurers cover for up to £1m rebuild irrespective of actual value - makes more sense to go with them really.
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Re: Silly persons

Postby Nick » Mon Jan 20, 2014 8:41 pm

I think most lenders assess the insurance requirement with the loan application? (you'd know this better than I).

A long time ago a good broker I had fed me the rebuild values (on a sq. m. basis) that insurers were looking for, but I have had issues in the past with wildly differing rebuild valuations on identical properties, the truth is that they make it up as they go along. At least most of the time no one claims, and it isn't a problem.
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Re: Silly persons

Postby Jo King » Mon Jan 20, 2014 9:05 pm

I think most lenders assess the insurance requirement with the loan application? (you'd know this better than I).


Yes - as I said "if you don't have a mortgage".

I recently had to go through this exercise with the barn - it was hopeless. Easier to stick with the 'up to £1m' rebuild insurers.
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Re: Silly persons

Postby Steve Griff » Tue Jan 21, 2014 8:18 am

I moved my insurance a few years ago and when they asked me for insured.values.I asked them if they meant market or rebuild and The broker insisted market value and their quote and premium were excellent.
Some time later I rang and queried again and found I had to pay double the premium as with most terraced houses the rebuild value is double the actual value!
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Re: Silly persons

Postby Jo King » Tue Jan 21, 2014 9:59 am

That's shocking service Steve.
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Re: Silly persons

Postby keith » Tue Jan 21, 2014 10:04 pm

Steve this is the case with a lot of terraced, town houses and semis.

Houses on small plots also tend to fall into this as the cost of clearing a site can be quite high
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Re: Silly persons

Postby Steve Griff » Wed Jan 22, 2014 8:37 am

keith wrote:Steve this is the case with a lot of terraced, town houses and semis.

Houses on small plots also tend to fall into this as the cost of clearing a site can be quite high


Now I understand why, it makes perfect sense, the worrying thing is firms while I was 50% underinsured, the same as the people you mentioned!

For your average householder, they would be better off with a blanket cover, but for a portfolio landlord it would not be cost effective overall, no doubt the extra insurance would push costs up.
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Re: Silly persons

Postby LisaOrme » Sat Feb 01, 2014 9:51 pm

I did two insurance policies on the same day last year that perfectly demonstrated the point:-

Terrace oop North; purchase price £43k, rebuild value £235k

London semi; purchase price £635k, rebuild value £165k

Its a common misconception.

The landlord insurance we usually recommend is charged based on rebuild but will rebuild irrespective of the cost with no upper limit.

The insurers aren't daft and they'll check for reasonable rebuild values but its a brilliant addition to the policy; still people will try to save a few quid on the premiums!
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