Building Insurance: Does total sum insured to rebuild house includes the land value?

Hi
Quick question:
Do Building insurances include the value of land in there "rebuilding a house" calculation?
Say your market value is $550000 including the land
Your home gets destroyed by cyclone.
Debrisremoval :$40000
Legalcosts: $10000
Value of land $250000( land will still be there after cyclone)
House building cost 5 years ago( assuming its still roughly the same): 2500000
The building calculators from CoreLogic come up with aprox.: $500000- $700000 rebuilding cost which is ludicrous.
I cannot find if these calculators include the land value or not.
If i exclude the land value i would only come up with roughly $300000
Of course depending of the total sum insured ( $300000 versus $600000) it will cost $35000 versus $17000 per annum.

I appreciate your knowledge
Kristina

 

Land is NEVER included in the sum insured as it isnt capable of "loss" through defined events. The policy name says it all - BUILDINGS !
Policy covers vary. One insurer recently was advertising a 20% allowance to the sum insured above the sum insured.

Not sure where $10K of legals for a cyclone would come from. Building design plans, approvals etc fair enough. Note councils wont charge levy contributions to rebuild but will charge standard fees.

You can also overinsure and get paid less when you claim. eg You insure $600K and the cost to rebuild a basic project 3 bedder is $245K. They might only pay $300K

Fencing, gardens, outbuildigs, driveways, shed etc may also be uninsured or need to be included. Some elements arent included in cover too. eg lawns, gardens, etc. Read each policy for inclusions AND exclusions.

Most general insurer websites have cost estimators but also READ THE POLICY

 

Hi Paul
Thank you very much for your reply
I try to make sense of the high costs the insurances claim it costs to rebuild a home. My house, 5 years ago brand new with everything included( pipes, driveway, electrical etc) was $230000.i get it prices may go up etc. Over the years so rebuilding price might chanfe. However Insurance estimate according to calculator all come up with $550000+.Bit high. It does not make sense. I try to find a company where i can stipulate the amount to insure to keep the premium down. Not easy.
Kristina

 

Yes I have a property like that also! I paid $535,000 for it, mostly land value. Insurance companies keep valuing rebuild at similar price.