Property value and rebuild costs are entirely different – which one do you use on your home insurance policy?
Home insurance usually pays to repair or rebuild your home if it’s destroyed by damage. However when it comes to the rebuild costs we’ve seen drastically inaccurate figures, said Insurance Claim Expert, Paul Murchan, Director, Gullion Ltd.
Paul continued, “We’ve seen many policies whereby the policyholder (PH) has simply stated how much it would cost to buy their home rather than the actual rebuild cost. Considering that market values typically outstrip rebuild values, and often by substantial amounts, as they are influenced by location, local amenities and travel links etc. then the figures are hugely inaccurate.
“Additional factors such as where you live and the costs of building materials and labour means that the market value of your property could be higher or lower than what it would cost to rebuild your home, if it were completely destroyed.
“Ultimately if you underestimate the rebuild costs, any payout may fall short of what you need however if you overestimate then you may pay a higher premium unnecessarily. Insurance companies will only pay the maximum amount for which you were insured and we can only negotiate your claim based on the contract you have agreed with your insurance provider. The onus really is the PH to get this detail right or they could leave themselves out of pocket.”
There are FREE online calculators to help guide you to the correct rebuild cost:
Ireland – Insurance Rebuild Calculator
Northern Ireland – Insurance Rebuild Calculator
Paul added, “Other than the standard information like property type and style, to get the rebuild costs you’ll also need to know some additional details such as the date it was built, square footage and the building material used for the walls. Of course if your home is bespoke in any way then the figure may need to be adjusted to reflect this. Essentially it is straightforward and absolutely worth getting right, should you need to make a claim.”
In the unfortunate event where you need to make a claim, contact Gullion Ltd Loss Assessors and Surveyors on 028 3082 8838. Regulated by the Central Bank of Ireland and authorised and regulated by the Financial Conduct Authority we will negotiate the best settlement on your behalf to ensure you achieve your full entitlement, under the terms and conditions of your policy. To reduce stress and streamline your claim, restoration works is an optional extra service which we also provide.
Gullion Ltd – you’re number one choice for insurance claims. For more, Gullion Ltd can also be found on Facebook, Google, YouTube and Twitter.