House insurance - rebuilding costs

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martyyn

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#254380 9-Aug-2019 17:22

I'm just renewing the insurance on a 100m2, 2 bed, single level brick house and the question of rebuilding costs came up.

The insurer ran their own online calculations and came with $262k. I tried three different online calculators with NZ insurers which all came in between $350k and $380k.

Anyone have any insurance101 pointers so we can work out a suitable number ?

Jase2985

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#2293118 9-Aug-2019 17:40

ask a GJ Gardner or Signature homes for how much one of their places costs that matches what you currently have.

you might be surprised.

martyyn

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#2293121 9-Aug-2019 17:45

Gardners are building around us at the moment. Dozens of new builds in the last 12 months with dozens more scheduled.

My understanding is a 3bed comes in at around $350k, whilst they are on the market for significantly more than that.

SATTV

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#2293122 9-Aug-2019 17:46

remember you have to pay for demo, foundations etc so you will need to allow 10 - 50k demo as you might have asbestos, also if a major disaster happens prices will go through the roof for a tradie.

Foundations will have to be bought up to modern code & standards, this is why EQC tried to repair houses rather than demo & rebuild ( which they should have done ) Allow another 50k - 100k

Depending on the disaster what is covered, if you have a retaining wall you will need to factor that in.

I came out at $5000 / square, the insurance company had $2000 - 2500 / square meter.

Most insurance companies are advertising that they will rebuild your house no matter what the cost in case of fire, however in a natural disaster they will only pay to the amount you are insured for.

I think you are better to over insure to a degree but you are worse off if you are underinsured or have none.

John

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SATTV

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#2293123 9-Aug-2019 17:48

martyyn:

Gardners are building around us at the moment. Dozens of new builds in the last 12 months with dozens more scheduled.

My understanding is a 3bed comes in at around $350k, whilst they are on the market for significantly more than that.

In my area you are looking at $600k for a new build, have to admit that is five bedroom, two story looks nice but nothing flash. ( next door just went through that exercise a few months ago, looking at a demo and rebuild )

I know enough to be dangerous

DjShadow

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#2293128 9-Aug-2019 18:04

When we took out our house insurance with Aon/Vero our broker asked us to work out a sum insured using the Cordell Calculator: https://sumsure.corelogic.co.nz/#/products/8/profiles/213

Your variance in cover maybe due to the GST inclusive/exclusive figure, Aon wanted the GST exclusive one whereas AA Insurance wanted the inclusive one.

timmmay

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#2293187 9-Aug-2019 19:52

I got a registered valuer in to do ours. On a slightly sloped section with easy access demolition was priced at $30K for a 140 or so square meter house on a 1303 square meter section, in Wellington suburbs. You have to demolish, haul away, prepare the section for building.

All in all the rebuild cost was about $50K more than the valuation of the house at the time.

A new build in Wellington for a 3 bed, two bathroom is around $500K. We were going to do that, but the land price is about $400K - 500K in Wellington for anywhere near town, plus up to $100K for site works given most sites are on the side of a hill and need significant land works. I don't know how people can afford this, maybe it's 30 year or longer mortgages.

Goosey

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#2293192 9-Aug-2019 20:02

As others have said, its important to include 'demolition', remedial work on the land, council permits/fees (including dissconnecting/reconnecting all services at the boundary).

Dont forget landscaping, fence, letterbox and driveway.

Some banks give a free one time only 'valuation (by registered valuer), if you have a mortgage with them.

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martyyn

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#2293431 10-Aug-2019 10:30

Sum Sure was what the person on the phone said they were using. I've done it on the sumsure website with identical information and get a very different result. When I questioned them about the figures they assured me their lower number included demolition and foundations, etc.

I think I'll go with the larger amount. It's a basic 2 bed, single level, semi-detached flat on even ground with no known fault lines through Otaki. I think that will be enough.

Clawhammer

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#2293557 10-Aug-2019 14:34

We have just been through the this exercise.... it's a nightmare. Insure for too much and the insurance co. wins, too little and the insurance co. doesn't lose but you cannot fully replace what you had.
The on-line calculators seem to come in very high, can't imagine why they should. We had the benefit of a nephew in the building trade to advise us and settled for a cost of $3000/sqm, quite a big house so the unit price is probably a bit less than a smaller one. This is probably a bit high but the extra buys a bit of peace of mind .
The big unknown is that with a new house being built to modern standards and regulations, foundations, structural work and retaining wall calculations will have to be re done, it'll cost you more with little or no benefit to you.
It'll stay like this as long as the insurance cos are allowed to write the contracts and conditions and decide if the customer has met all of them.
Best of luck. Geoff.