In Property Claims Loss Assessors ltd (PCLA) the most common problem we have is people being underinsured. This could be as a result of the last recession where people sometimes get mixed up and think the value of your home is what you should insure it for. This is completely wrong you need to insure your house and outbuildings for the full cost of rebuilding. The onus is on you the policyholder to insure yourself correctly. The Society of Chartered Surveyors (SCS) have a rebuild calculator. Simply measure the internal floor area of your house and make additions for the garage, build in wardrobes, special finishes eg Hardwood floors, fences and walls (note storm damage to fences is excluded) and finally disabled ramps etc. The SCS give different rates for the type of house and are constructed in.
We had a landslide in a back garden in the strawberry beds in Dublin after the big freeze thawed in January 2011. The cottage was insured for €200k and the cost of repairing the slope was 200k. The insurance company tried to argue that the property was underinsured ie it should have been insured for €400k. We argued that our client had insured himself per the SCS and therefore they had no right to apply average. Our argument prevailed but our client did up his his insurance after the claim to 400k
Insurers can apply average on a claim if a property is underinsured. As an example if the SCS calculator (referenced above) calculates that your sum insured should be €300,000 and your only insured for €150,000 then you are 50% underinsured. If you have a claim for €50k they will only pay you €25k. As buildings cost could increase with the new housing boom its important to calculate you rebuild at renewal every year.
The best way of calculating this is room by room and list all loose furniture. Remember its new for old . This can mean inflation and deflation. Eg the cost of furniture may have risen but computers and electronic devises have come way down in price. The current price is the important one. Think about taking the roof off your house and turning the house upside down. What falls out is your contents. Carpets (excluding glued down ones) and curtains are considered contents but kitchens and built in wardrobes are buildings. Loose wardrobes ( unattached to walls ) are contents.
If you’re making an insurance claim its worth using a professional. Not all of your damage may be visible to the human eye. In PCLA we know all the pitfalls and where to look for damage in the most unobvious places.
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