Would you ever have house & content with different insurers?

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Batman

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#119576 6-Jun-2013 13:51

If I go with a certain house insurance provider they will pay full replacement instead of sum insured.

If I go with another contents insurance provider I save $1000 and get other goodies like no excess on glass /sanitary fixtures.

The house insurer is saying it is not a good idea to have separate insurers for home and contents.

What do you think or better still what is your experience?

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#831604 6-Jun-2013 14:07

The risk you face with going with two different insurers is that they will have different definitions of what is "house" and what is "contents" so you may find something is not covered.

Bung

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#831607 6-Jun-2013 14:09

Which company is sticking with replacement? Most are transferring replacement policies to sum insured at renewal time. They blame cost of reinsurance after Christchurch.

Batman

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#831626 6-Jun-2013 14:38

well it's a private society type thing ... I found out that if I insured both with AMI (house at $2700+/sqm) I will still save $1500 along with lots of extra goodies ... hmm ...

Fred99

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#831628 6-Jun-2013 14:39

Bung: Which company is sticking with replacement? Most are transferring replacement policies to sum insured at renewal time. They blame cost of reinsurance after Christchurch.

It's not just cost to the insurers- but the reinsurers are "calling the shots" - as they (claim they) need to know total risk exposure. There's not a lot of competition between the reinsurers - as there's only a handful of them - who "get together" regularly anyway.
So if a local insurer is still offering total replacement, it's almost certainly goiung to change to sum insured as the insurer's reinsurance contracts roll over.

A big problem in Chch is demand-surge inflation. While many people have the impression that contractors are being screwed down hard by EQC/EQR and the insurers, from the top (Engineers/Architects/Geotechs and of course our beloved council with their building consent rort) to the bottom, everybody is in for as much as they can possibly get away with.
So, don't count on even sum insured based on online calculators to cover rebuild costs if there's another natural disaster of this scale in NZ. My neighbour is getting a rebuild - he paid $550k for the 2 brm house & section about 3 years ago. To rebuild the house is costing the insurer about $750k - over $3,500/m2.

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#831657 6-Jun-2013 15:25

Fred99:
Bung: Which company is sticking with replacement? Most are transferring replacement policies to sum insured at renewal time. They blame cost of reinsurance after Christchurch.

It's not just cost to the insurers- but the reinsurers are "calling the shots" - as they (claim they) need to know total risk exposure. There's not a lot of competition between the reinsurers - as there's only a handful of them - who "get together" regularly anyway.
So if a local insurer is still offering total replacement, it's almost certainly goiung to change to sum insured as the insurer's reinsurance contracts roll over.

A big problem in Chch is demand-surge inflation. While many people have the impression that contractors are being screwed down hard by EQC/EQR and the insurers, from the top (Engineers/Architects/Geotechs and of course our beloved council with their building consent rort) to the bottom, everybody is in for as much as they can possibly get away with.
So, don't count on even sum insured based on online calculators to cover rebuild costs if there's another natural disaster of this scale in NZ. My neighbour is getting a rebuild - he paid $550k for the 2 brm house & section about 3 years ago. To rebuild the house is costing the insurer about $750k - over $3,500/m2.

Are you serious? I can't imagine an insurance company putting up with that. Do you have any idea why it would be? I can only think that everyone is tacking on accommodation and living expenses for out of towners, which means the local builders are laughing.

mattwnz

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#831660 6-Jun-2013 15:37

Bung: Which company is sticking with replacement? Most are transferring replacement policies to sum insured at renewal time. They blame cost of reinsurance after Christchurch.

They do exist. Mainly the rural ones I think. If you have to go for a sum insured policy, people would be wise to get the house professionally valued as to what it would cost to rebuild, which is about $1000 in cost.

eXDee

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#831665 6-Jun-2013 15:47

graemeh: The risk you face with going with two different insurers is that they will have different definitions of what is "house" and what is "contents" so you may find something is not covered.

I imagine it might come down to what is defined as chattels vs fixtures in property law. There's quite a bit of case law surrounding this.

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mattwnz

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#831666 6-Jun-2013 15:51

Fred99: To rebuild the house is costing the insurer about $750k - over $3,500/m2.

That is why I think the government should have regulated the price that contractors,material providers, and land developers could charge in this particular event, so that they remain in line with what is required. It is a one off natural disaster after all. In the end we will all end up paying if they get away with inflated prices. The prices shouldn't have risen by more than inflation.

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#831671 6-Jun-2013 16:04

If it is tc3 land you need piling down to ?30m into the ground as well as structurally superior walks base etc.

youngs

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#831693 6-Jun-2013 16:35

Was with AMI. Just moved to Tower who were still offering full replacement for the house. Contents and car insurance also moved to get better discount.

Fred99

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#831696 6-Jun-2013 16:37

mattwnz:
Fred99: To rebuild the house is costing the insurer about $750k - over $3,500/m2.

That is why I think the government should have regulated the price that contractors,material providers, and land developers could charge in this particular event, so that they remain in line with what is required. It is a one off natural disaster after all. In the end we will all end up paying if they get away with inflated prices. The prices shouldn't have risen by more than inflation.

The cost of $3,000 - $3500/m2 is typical around here. Sloping section with engineer designed foundations. Green zone with no "TC" or particular Geotech issues. The site isn't isn't suitable for a "Golden Homes" type design and build. The site is also limited by resource consent as the house which was demolished wouldn't meet zoning requirements, so must be built with "existing rights" (or comply with current regs). The architect is charging something like $45k, then there's engineers, consent fees/inspections, etc etc etc. It soon adds up to $3500/m2.
IMO, the owner would be better to take the money and run, but that's his decision not mine. OTOH an ordinary house just down the road sold at auction for $1.1m the other day. House prices in Chch are almost as nutty as they are in the perilous Auckland frothy bubble. I fear that it's not going to have a happy end for many people.

The government can't regulate prices as you suggest. The best that they've been able to do is "bulk buy" materials, as they've done for paint and other building supplies used for under-cap repairs by Fletcher EQR.
About the best they could do is arrange for shiploads of Philippine builders to come in - but the reality is that it's not so much a shortage of workers, but builders who are familiar with NZ building code and work practices and navigating all the bureaucratic hurdles and BS from insurers, before they can even get off first base. Wages for the "hammer and brush" hands aren't great, material costs haven't risen that much - but a few people are making absolutely vast profits ATM.

I need to get repairs done on my house (self-managed repair) and I am having problems finding contractors who can do the work. I am going to have to pay much more than I would have done in "normal times". It is also unbelievably frustrating trying to navigate your way through the process of design, consents, contract works insurance, then lining everything up. If I didn't have any insurance, I'd have just fixed my place myself long ago, at a fraction of what it's going to cost, using the owner/builder exemption to the building code (as I'm not an LBP).

At present rate of progress, despite repair work having ramped up in recent months, the insurers won't have settled their claims by 2025. It gets worse when you consider that both the insurers and EQC have started with all the easy stuff (cosmetic repairs by EQC / full demo and rebuilds by insurers). If, like tens of thousands of others in my position, you've got difficult/complex repairs, then nothing much has probably happened.

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#831703 6-Jun-2013 16:57

youngs: Was with AMI. Just moved to Tower who were still offering full replacement for the house. Contents and car insurance also moved to get better discount.

so the only reason to for the switch away from AMI is the price rather than the service/bad experience?

still considering AMI as I like their goodies bribes

mattwnz

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#831736 6-Jun-2013 17:23

Fred99:
The cost of $3,000 - $3500/m2 is typical around here.

I heard that there is currently a government enquiry into the construction sector, and building materials costs, as to why NZers pay significantly more than they do in Oz, for the same materials. Reducing those costs would be a start. I had heard that contractors also get rebates back from suppliers for recommending particular brands.
Luckily in this case insurance is paying for it. But if we had this same situation , but it was agreed value, rather than replacement cost, then many people will be out of pocket, due to the per metre rate inflation being so much higher in Christchurch than other parts of the country at the moment.

youngs

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#831738 6-Jun-2013 17:27

joker97:
youngs: Was with AMI. Just moved to Tower who were still offering full replacement for the house. Contents and car insurance also moved to get better discount.

so the only reason to for the switch away from AMI is the price rather than the service/bad experience?

still considering AMI as I like their goodies bribes

Both bad experience with leaking bathroom and service just recently.

For gradual damage AMI told me up to $1,500, Tower told me up to $5,000.

Bung

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#831741 6-Jun-2013 17:29

youngs: Was with AMI. Just moved to Tower who were still offering full replacement for the house. Contents and car insurance also moved to get better discount.

Yet Tower have the same spiel re sum insured as the others

"You’ll need to provide us with your sum insured value when you start a house insurance policy with us and / or at your policy renewal, or at least get yourself comfortable with the default sum insured value that you are provided on renewal, to ensure it’s sufficient for your house.If you’re unsure what your sum insured value should be, we suggest using the calculator as a guide or getting in touch with a valuation professional."

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