insurance - building replacement costs

[Angel]

Hello

I'm still gasping in shock after the latest renewal from the insurers for our house in Gladstone. I haven't got any renewals yet this year for the Brisbane ones so I'm not reaching for the valium just yet.

In considering our options, I thought I would check what the typical rebuilding costs would be for a regular 3/1/2 lowset brick veneer. I haven't found any prices on builder's sites though. Does anyone have any idea what the good builders charge up there these days post boom? The bank wants it priced for $300K but I keep reading so many threads where you guys build 4/2/2s for under $200K. I do realise there are other costs on top of the rebuild costs.

I just did an online insurance quote which is $200 cheaper if I drop the value to $250K.

Also can anyone say what premium surprises are in store for Brisbane properties?

 

[beachside]

There is so much building work going on up there, even if winding down, I suggest you contact a few builders and ask them ...pretend you have a block you want to build on. I was driving around these areas in June and there are so many builders there. I suggest you look on RE.com or the local rag on line for land for sale and contact these groups for names of builders. I probably have a few names written down in my note book in the car - for different reason. GJ Gardiner is one franchise builder I remember. What I did notice throughout central QLD is that the cost of building is a lot higher than in the capital cities - blew me away, much more than I expected even after an allowance for transport.

 

[Colin Rice]

I would consult the services of an insurance broker. Cant recommend anyone as I am in Perth but there are plenty around. They usually work the same as a mortgage broker, that is, get paid by insurance companies for introducing customers so are often good sources of free advice.

 

[Angel]

Thanks for your replies. I contacted a few builders and the one who got straight back to me said $288K for a house the same size as ours. So $300K it is. I paid the insurance last week, about $600 more than last year.


The EBM LL insurance on the townhouse in Bris is exactly the same price as last year . The premium for the big house at North Lakes is about $300 more. I have written to the broker to ask for a reduction and will go to a different company otherwise.

 

[brettc]

Thanks for your replies. I contacted a few builders and the one who got straight back to me said $288K for a house the same size as ours. So $300K it is. I paid the insurance last week, about $600 more than last year.

Sums insured are always tough, I know I've reduced mine in the past as well. I must say though I read what seemed to be some interesting advice recently, maybe it was on Somersoft but I think it was elsewhere.

They said they take the current building replacement cost, add 20% to allow for removal of debri and site clearance etc., and add another 20% to allow for the fact that if there is a natural disaster building prices can skyrocket due to a shortage of tradies and materials etc.

That would certainly explain some of the suggested sums insured I've seen but is taking a worst case scenario approach.

 

[beachside]

It also depends on what is covered in SI and what is covered in addition to SI. To get the same coverage from 2 different insurers could mean you insure at $200k with one and $225k with the other.

 

[brettc]

It also depends on what is covered in SI and what is covered in addition to SI. To get the same coverage from 2 different insurers could mean you insure at $200k with one and $225k with the other.

That's a really good point and you're quite correct. For example with our RentCoverPlatinum product, if you insure for $200,000, you get up to $50,000 additional at no extra cost for your "contents" (carpets, curtains, blinds, light fittings etc.). Whereas with some policies you would need to include the value of your contents in the sum insured.

So effectively you can insure for a little less, lowering the premium.