Here’s a comment posted recently by a ValueIreland.com reader which is linked to todays topic – rebuild costs for the purposes of insurance policies:
I recently renewed my home insurance with a different provider and amended the building sum insured in accordance with the Society of Chartered Surveyors (SCS) Guide to House Rebuilding Costs published.
I forwarded details to my mortgage provider of the renewed policy and received a response suggesting I reassess the current building sum insured.
I responded and advised that I had used the SCS’s Guide.
I received a further response from the mortgage provider advising that in order to change the building sum insured for your property, the mortgage provider will require a current valuation report drawn up and sent to us by your Valuer/Estate Agent.
The Financial Regulators – Guide Home Insurance Made Easy,on Page 4 advises:
“You should insure your home for the amount it would cost to rebuild it. This is called the reinstatement value. It is different to the market value of your home, which is the amount you could get if you sold it. The market value includes the value of the land your home is built on and the location it is in, but the reinstatement value of your home only covers the cost of rebuilding it. To get a rough estimate of the cost of rebuilding your home, use the home-building cost figures in the ‘Guide to House Rebuilding Insurance’ available from the Society of Chartered Surveyors”
Requiring a valuation report to amend the reistatement value of a property is an onerous and costly requirement.
I have lodged a formal complaint with the mortgage provider and I am still awaiting a response.
So basically I am required to over insure my property or get a valuation report which would cancel the savings I have made on updating my insurance policy!!
The requirement above to get an actual market valuation rather than using the SCS rebuild costs valuations is particularly strange.