Home insurance

[porkchop]

How to i calculate the cost of replacing my house if it went up in flames. I received my renewal for house insurance and it has increased by 50%. I think its a rip off. How many houses go up in flames now that most of us dont have coal fires. Also they make you pay for at least 10% of the total cost for the contents of the house even though you may have a load of crap furniture. Anyway any suggestions of what i should put down for the cost of the house in the event of an unlikely fire. Thanks.

[factor-fiction]

I assueme you mean buildings cover as well as contents. Remember it may need to include the cost of demolishing the building, clearing the land and rebuilding it.
This guide helps: http://calculator.bcis.co.uk/

[Hymie]

When you look at the numbers, it is clear that house insurance is a nice money earner for the insurance industry. The last time I looked at my policy, the rebuild cost was put at £80k (but the house is worth a lot more than that due to the land/location).

I pay around £125 per annum for insurance cover – therefore for the insurance company to beak even – around 1 in 650 houses would be destroyed each year (needing a complete re-build). Extending this numbers game, if on average 3 people live in every property, then 1 in 3 people will suffer their house being destroyed (needing a complete re-build) during a 70 year life. Amazingly, I know no one whose house has been destroyed (requiring a complete re-build).

[factor-fiction]

Interesting analysis, hymie, which would be valid if the only only claims were for house fires. But in reality most claims cover things like damage to windows, bathroom fixtures, and other fixtures and fittings; and there's flood damage, subsidence, storm damage to your roof, legal liability and damage to walls.
But you may be partly right- it may be that insurers make money on buildings cover and use it to subsidise losses and fraud on contents insurance

[porkchop]

Hymie, i think you are right, its a bonanza for the insurance companies. All the premiums are invested in mega skyscrapers to make even more profit for these greedy conglomerates. In the area i live i just cannot remember a house going up in flames. Perhaps the only houses that go on fire are those who still use coal or wood logs and they maybe have no insurance whatsoever. The insurance companies spend a fortune on advertising and the householder is made to feel guilty if his property is not insured to the maximum amount.

[Hymie]

I would add that the insurance industry is a lot more competitive than it was say 40 or 50 years ago – when there were less companies to choose from.

Make sure you get the best deal by checking out comparison web sites – and those well known names who don’t pay to be in their listings (Direct Line, Aviva etc.). Many offer a good deal on the first year’s cover (as a new customer) to hook you – hoping that you will stay and pay the increases in the following years.

[twix123]

You don't need to have coal or log fires to burn a house down! Nearly 40 years ago, one of our neighbours decided to run a bath, whilst waiting for it to fill she turned on her gas oven, without lighting it, then lit a cigarette. Luckily she was blown straight out through the kitchen door into the garden, but he house was destroyed together with a lot of damage to the other semi detached house next door.

As you can imagine, the rebuilding cost was extensive, but was covered by her insurance!

Furthermore, if you still have a mortgage, your bank or building society will insist that rebuilding costs are fully covered.

[porkchop]

HI. Twix 123. Sorry to hear about your neighbours trip out to the garden. Dis she ever finish her cigarette?

[woozer]

Home Insurance covers a lot more than just fire claims - why get so het up about it ? Use the rebuilder calculator that Factor 30 has suggested and then shop around.
Electrical fires are quite a problem but over the last few years most insurers have made some thumping losses because of flood damage - and thenof course there is fraud which is a massive problem. Perhaps if some claimants were more honest your premiums would be cheaper.

[Pollypeptide]

Friends of mine lost their home to a fire three years ago. The fire was caused by a TV left on standby. Luckily there was no one at home at the time but they lost everything except the clothes they were wearing. It took almost two years for the property to be re-built and in the meantime the Insurers paid for rented accomodation for them. Ask them if they think insurance is a rip off.

You don't have to pay for contents insurance (or buildings insurance come to that, if you don't have a mortgage) but then don't look to someone else to bail you out if something goes wrong.