Every year we renew our house insurance – part of which is for rebuilding if we
are unfortunate enough to suffer a fire. Most policies adjust the rebuilding
amount each year in line with an index.
So that’s Alright
No, says Robert Fairbairn of Goadsby. At a time when building costs
are rising quickly, applying a national index can lead to an increasing gap
between the indexed figure and the true cost of rebuilding.
arises, says Robert, because the cost of labour and materials changes at
different rates across the country. Applying a national index over the years can
lead to distortions in the sum insured from the true figure.
amount insured is higher than the true figure, then the premium each year will
be higher than needed.
More of a problem is being under insured. If you
are unfortunate enough to suffer a fire, the insurance company will re-assess
the building cost before meeting a claim. Even if only a small part of the
property is damaged, the insurer will only pay part of the claim in line with
the proportion of the ‘under insurance’ of the whole building.
pitfall is believing that the property needs to be insured for its market value
less the value of the vacant plot. Houses very rarely burn to the ground and so
the rebuilding cost has to take account of the cost of building a similar
property rather than a new one.
Robert is currently advising a number of
property owners on current rebuilding costs.
You can contact Robert on
Goadsby Commercial are delighted to have 105 - 590 sq ft all-inclusive office space in the popular location of Jewry Street in Winchester City Centre.
Goadsby Commercial in Hampshire are delighted to report on the completion of a unique storage unit to the rear of Blenheim Road and The Swan Centre.
Goadsby Commercial in Hampshire are delighted to report the letting of 19 Bedford Place, and welcome Tim’s Bistro, a new Bistro/Café to this thriving part of Southampton.