Calculating House Value for Insurance Purposes

[101RRS]

My house and contents have been insured with AAMI for some time and it is time to renew the policy. Now AAMI do not insure for a value and simply state that they will restore the house to its original condition. The issue is that if I have to claim, particularly if the house is completely destroyed I can see that the insurance company may have different ideas than I do as to its original condition. Also if I was to rebuild I would build the house to a different layout.

Now to get alternative quotes I need to know what the house (not including land value) is worth? I know what similar houses are selling for and what my official land value is but when you take this away the cost of the house seems a little low. Having been through the Canberra fires I know most houses are generally under insured and most people do not take into account block cleanup and site preparation which is far more costly than you may think.

So how are people working out what their houses are worth for insurance purposes? One insurance company suggested getting it valued but that is a bit expensive.

Thanks

Garry

[isuzurover]

Easy. How much do nearby home building companies charge to build an equivalent house (e.g. same number of bedrooms and stories), PLUS how much would a demolition company charge to remoe the charred remains of your old house.

e.g. - you could call these guys:
http://jaydoug.rtrk.com.au/'scid=137547&kw=15582:157540&pub_cr_id=12992409729

[clive22]

Hi,

Find value of raw house per a builder price as Isuzu rover said then add items which are not included in 'basic' building costs often quoted in builders ads.

Inside:
Drapes
Carpets
Floor Coverings
Light Fittings
Robe fit-outs etc.
Ariels/Masts/Computer wiring
Extra Wiring,outlets, insulation or other 'extra' that you have

Then add again for outside items that would not survive an intense fire or reconstruction i.e.

Retaining Walls - fire usually spalls and destroys concrete
Planters
Driveways & Paths - usually ruined when heavy machines move in
Fences
Clothes Lines
Pumps, septic water tanks, etc.
SWDs, pits, agi drains they wont cope with a rebuild.
Plants
Sheds, workshops
Powerlines - may be tricky to resuse

Also Site may have to be re-worked (earthworks/retainer, etc.) if design is not exactly the same and if your block is steep so be generous to yourself here.

All that can add up to 50% on the basic price in a builders advertised rate.

When I do mine I'm generous to myself.

Hope that helps

Clive

[mike 90 RR]

you calculate via square meters ... Each type of construction = different sqm $ rates

Square metres of
.... Floor area of ground floor (home) = ? ..... (times per sqm $ rate) = $?
.... Floor area of upper floor (home) = ? ..... (times per sqm $ rate) = $?
.... Floor area of verandah = ? ..... (times per sqm $ rate) = $?
.... Floor area of garage = ? ..... (times per sqm $ rate) = $?
.... Floor area of carport = ? ..... (times per sqm $ rate) = $?

Talking to a (building) Quantity surveyor can give advise to appropriate rates in your area

Cheers
Mike
:)

[101RRS]

Thanks for all that great information - might be easier to just insure it for the house and land value that way the value of the land will cover the "extras" if the worst happens.

Cheers

Garry

[isuzurover]

Thanks for all that great information - might be easier to just insure it for the house and land value that way the value of the land will cover the "extras" if the worst happens.

Cheers

Garry

I doubt any insurance company would do that??? It may be seen as overinsuring and therefore high risk...

Unless you live in a flood or bushfire prone area, it sounds like you may be about to throw a lot of money away on very high insurance premiums, even if you can find a willing company...

[stock]

General rule of thumb not including purchase of the site is Local rate /sqM + 25% clean up Local authority charges. 50% of house value for contents. garage and shed will be extra unless part of the dwelling.
Commercial rates here per sq M are €850 this will include associated site work such as paths, planning fees, service connections, foundation excavations and preparation of the design package.........O! and the materials and labour to builders finish. this means kitchen,bathroom and finishes are extra as they are considered as contents.

If you under insure they way it is worked out is

your value
---------------X your claim value
their value

so if your value is 100k and theirs is 150k its 100/150 x120= 80k will be their payout....................
no it doesn't work the other way if you over insure...............

[Chucaro]

I would like to add that before you insure your home read very well the small print.
Some insurances companies will not pay if the property was not maintained in good order. (the insurance company belongs to the Commonwealth is one)
As an example if the gutters are rusty or have a hole then your home will be not be insured.
Further more, if the Colorbond roof show signs of rust or is in the way out and have been not maintain properly (replaced screws, paint, etc) the insurance company will not pay.

hat really annoy me is that they are prepared to accept your insurance proposal without inspecting the home :mad:
Here in Hobart, I can telling you that by looking at the roofs of the homes many of them will not be covered in the event of logging a claim.

[WhiteD3]

Garry,

I went through this last year after our 2 break ins, re-insuring the house and contents, both of which were way underinsured. To do the house I found that the insurance companies had a very good estimating tools online to do this.

Contents was just making a list, checking it twice then getting online to price check.

Good luck, its a big job.