When it comes to taking out insurance how does everyone go at calculating how much to insure the building for ? Do you get a professional valuation, take a guess ?
Has anyone had a house burn down and then needed to claim on insurance? How does the insurance company determine a value from ashes ?AJBS
Hi There
Interesting question. And, no, I have never had to claim thank goodness. But I figure it is better to be over-insured rather than under-insured.
When I’ve bought property in the past, I’ve known what the approximate land value is which I take off the purchase price and that is what I got my cover note for when I’ve signed the contract. (well, I added about 20% on for “just in case” – which also included an estimate for demolishing of the building to make way for the new one).Also, it depends on whether you have bought below the market or at the market.
Then, I asked a builder friend what the cost per sq mtr of building was depending on the type of house and that helped me determine the final amount I actually insured for replacement value.
Hope this is some sort of help.Cheers
DinahEvery insurance company has a formular for working out what a house shjould be insured for. If you ring your company there will tell you what you house should be insured for. If your property is insured for less than the insurance companies requirements it means your are under insured and if you need to make a claim you may find that the insurance company will not pay out the full amount. So dont second guess check with your insurer.
Nigel Kibel
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We also calculate what we think the house should be insured for, taking into account block clearing, etc. We then increase the figure we get so that we are over-insured.
Being under-insured is really scary and for the extra few dollars in premium, we go the other way, just in case.
My thoughts, Wylie.
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