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Building Insurance...

8 replies

dilbertina · 11/05/2012 18:04

Have posted in Property and Legal as I was not sure where I might be more likely to get a response...!

We are in the process of buying a grade2 listed 400yo thatched cottage. The Building Society Valuer has been in and valued it at price we're paying, with a "rebuild" insurance figure of £375k. We were planning on using the building society own insurance policy.

We also independently have had a full building survey carried out by a surveyor specialising in period and thatched property. I asked him to provide a figure for rebuild for insurance and he has given figure of £620k (which is well in excess of purchase price but probably more realistic).

This is obviously a huge disparity. If we go for the Building Society insurance and their "rebuild" figure is totally insufficient and then the worst happened and the house needed rebuilding what would happen? Would they only pay up to £375k and would we or their surveyor (via indemnity of some kind presumably) have to pay the difference?

Many thanks in advance for any advice, it's obviously not something we can ask the building society without ringing alarm bells!!

OP posts:

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RedHelenB · 12/05/2012 08:06

The insurance company would only pay out the 375 so you might want to pay more insurance to have greater cover.

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suburbandweller · 14/05/2012 12:59

I agree, the insurance will only pay out up to £375k. You might find it helpful to discuss with the surveyor where the higher figure has come from as it is unusual for the rebuild cost to be higher than the value of the property (i.e. the price you are paying). If there is still a disparity you might want to shop around for your insurance - some insurers offer unlimited buildings cover as standard - or you could always ask the Building Society to provide a level of buildings cover (it will be more expensive though).

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MOSagain · 14/05/2012 15:26

Also be very careful with regards to insurance due to the thatched roof. Years ago when I was in the police force my crew mate and I had to drag a man out of his burning cottage that had a thatched roof. He couldn't afford the insurance as it was so expensive (apparently because of the thatched roof) so he was uninsured and kept trying to run back in to save as much as he could. Heartbreaking

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nocake · 21/05/2012 21:33

The surveyor's figure is likely to be more accurate than a valuer's figures. He or she is better qualified.

If you don't have enough insurance then you won't be able to rebuild your house. It's as simple as that. TBH you're insane to take the building society insurance policy and not shop around. You'll probably find it cheaper elsewhere although with a thatched roof you'll need to call insurance companies for a quote. You won't get a quote on price comparison sites or many insurance company websites, only over the phone.

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trixymalixy · 21/05/2012 21:38

It's really not worth taking a risk on being underinsured, if you own a listed property. We also live in a period property with a rebuild cost greater than the property is worth. We had difficulty getting insured for a reasonable price, you can't get insurance via the comparison websites. We went with NFU in the end after recommendations from MNetters.

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CMOTDibbler · 21/05/2012 21:49

Don't compromise on the insurance - go with a company who specialise in listed and special buildings who, heaven forbid something major happens to your home will make sure it is sorted.

NFU are v good, although I think they've hiked their rates, Hiscox provide superb service and are v good with listed buildings, and Ecclesiastical specialise in historic buildings

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bruffin · 21/05/2012 21:50

They won't even pay out 375k, they will pay the percentage you are under insured.
Ie if it costs 750k to rebuild, you are 50% underinsured so they will pay out 50% of 375k.

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dilbertina · 22/05/2012 13:11

Many thanks everyone, all very useful advice thanks. The only reason we were going with Building Society own initially was because it would be much easier - one less thing to sort out. We're moving from France so anything that makes it easier is being grabbed with both hands!

Many thanks for the recommendations on specialist insurers, I will do some phoning around (when dc3 finally has a nap - she is at the insisting on talking to whoever is on the phone stage!!)