House insurance & re-build value

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Alternatively, ask your insurance company to increase the original value by the appropriate indexes - assuming it was right to start with.

As you rightly assume, rebuilding cost and market value are not directly related - and are often widely different.

Usually you can ask your insurance company to automatically increase the rebuild costs by the appropriate amount each year.

A few years ago when I had my house revalued my quoted rebuild cost was about 10% higher than the indexed value from the original value from the survey.

When I called up to have the value updated they said that because my insurance had been indexed from the original value they would have honoured the rebuild costs (provided the original value was reasonable which I assume it was) and, IIRC, increasing the insured amount didn't affect the premium that year anyway (and there wasn't a major change in premium in subsequent years either)

I suspect that unless a house is very unusual, most insurance companies will honour any claim if the valuation is reasonable and taken from the appropriate tables.

Tim.

No. Most of the fall in house prices relates to falls in the price of land, which your insurance doesn't cover. Materials have gone up in price a lot - by more than inflation generally. Labour costs will have increased in line with earnings inflation. There are standard indices you can use to work out rebuilding costs. Your insurance company should be able to assist.

Yes, that's my experience too. It knocked my premium down from the three hundreds to the two hundreds.