House insurance question

[jaye944]

I was reading some info (see below) on house insurance.

now... also when I bought my house in 2000 it was insured (bldg;s) now obviously the house has increased in price,do I need to keep the price adjusted according to my insurance company. or is it taken for granted that its current market price or buildiong cost etc.

what do you guys do ? if youve lived in your house more than a few years ?

a bit confused


Building insurance

Building insurance covers the structure of a building as well as its permanent fixtures, such as fitted kitchens, cupboards and bathroom fittings. You should insure your home for its full rebuilding cost, including debris removal and architect's fees, so you are protected if it is completely destroyed. Remember that the cost of rebuilding is not the same as the market value. Some policies offer useful extensions to the basic cover. To make sure what your building insurance covers and excludes, you should contact your local insurance broker to explain the fine print.

[lethal]

As it says, you insure for the current cost of rebuilding the structure of the house.

For example, you may find that including the ground clearance, complete reconstruction of a house with a notional market value of £250,000 may be just £60,000.

[jaye944]

byooingg

nows you totally lost me.

IN my case I bought my house for about £60k, think the documents at the time /deeds showed that was the price etc. my house is now worth about £180ish?

so should I not insure my house for £180?

how can a house reconstrcut be on £60k on a market value of £250k house?

cars/computers/power tools I'm good on, this house/finacial stuff I'm a bit

Originally Posted by lethal

As it says, you insure for the current cost of rebuilding the structure of the house.

For example, you may find that including the ground clearance, complete reconstruction of a house with a notional market value of £250,000 may be just £60,000.

[gixerboyuk]

The 250k price would also include the land upto the boundaries that the house is sat on which is more sought after and hence worth more than the building thats on it.

[nickyboy]

A typical 3 bed semi would cost a maximum of £60-£70k to actually build, the cost of the land would be £50k at least so its only the rebuild cost that you need to insure for. Not the actual value of the place.

[jaye944]

ahhhh

got it

THE land costs's

cool,
cheers all, panic over !

[lethal]

Originally Posted by gixerboyuk

The 250k price would also include the land upto the boundaries that the house is sat on which is more sought after and hence worth more than the building thats on it.

The point is that you don't insure for any more than the restitution value of the house.

You don't count the land value as, short of a meteorite creating a very big crater on your plot* the value of the land will not be affected by the destruction of the house.

Therefore, you insure only for the cost of rebuilding the house from scratch. You should ignore any notional 'market value' as it is well in excess of the actual material and labour cost of reconstruction.

*your insurance is likely void in the event of asteroid impact as insurers will have a get-out in their 'acts of god' clauses.

[jaye944]

maybe I should look into getting Asteroid insurance ?

Originally Posted by lethal

The point is that you don't insure for any more than the restitution value of the house.

You don't count the land value as, short of a meteorite creating a very big crater on your plot* the value of the land will not be affected by the destruction of the house.

Therefore, you insure only for the cost of rebuilding the house from scratch. You should ignore any notional 'market value' as it is well in excess of the actual material and labour cost of reconstruction.

*your insurance is likely void in the event of asteroid impact as insurers will have a get-out in their 'acts of god' clauses.