lancastrian48

If you have built a house for say 230k and it's worth say 530 k, how much should you insure the building for ?
I assume it would cost more to rebuild if a tornado blew it down ?

Sherlock Holmes

I think generally replacement cost is the total value of the property less the value of the land.

cresta57

I've heard that argument many times in the U.K with insurance companies.
We carried out insurance work & often found that after the initial call out to make the building safe the insurance company had refused to pay out further claims as the homeowner was under insured.
If you own the house & land & your land value is say 200 k with a 300k house on it then no matter what happens to the house you'll still have the land. That's not the case, if your house is valued at 500k inc the land & you insure for 300k your under insured.
The general excuse was that if the home was a total loss i.e structurally unsafe following a fire then the cost of clearing the site would not be covered by the new build price.

ukecadet

work it out on $1500 to 2000/square-metre. depending on fittings.Add 7% if your in Perth and another 20% if it's a difficult site.Put on $10,000 for demolition and removal

asprilla

$10,000 for demolition and removal

ukecadet

If the old place is knackered by fire,storm or whatever you have to get rid of it don't you? or would you like me to build on top of it.

ABCDiamond

That's correct in the UK, but I was surprised to find that Insurers here do not include the land value in the required insured sum. All they require is the demolition and rebuild costs.

However, to play safe AAMI do not require a value, they just cover you

And for anyone wondering how they work out the premium, they just do, without asking any values. I just did a quick quote check to see

cresta57

That's good news mate
We worked for two major insurers in the U.K & both used the same line "sorry but your under insured"
I don't think 10k would cover demolition & removal of a full house inc slab. A woman just next to us was recently charged 30k just to demolish a houseboat

Buzzy--Bee

$10k is the normal price for demolition and removal of an old house on stumps, in Melbourne anyway.

BB

cresta57

Agreed on stumps, no problem, a day's work with an excavator & it's done. Brick on slab & there's 3 times the work & 3 times the waste materials.
I taken mid terrace houses down to zero a few times, interesting experience. Over a week each time, brick by brick, salvaging enough face bricks for rebuilding the fronts. Very labour intensive & very expensive. We had to underpin the homes either side on a couple.