Insurance Quote

Discussion in 'Property Market Economics' started by Rajiv Srivastava, 11th Jul, 2019.

Join Australia's most dynamic and respected property investment community
  1. Rajiv Srivastava

    Rajiv Srivastava Active Member

    Joined:
    18th Aug, 2017
    Posts:
    33
    Location:
    Sydney
    My Home Insurance is up for renewal. I just tried to get quote for Home and Content Insurance fron NRMA, GIO and couple of others. During the quoting process I found out that replacement value to be around 1 Mil for 5 Bedroom Double storey average home. I was very surprised and went to few builder's website to find the cost of building similar size home and it was between 350K and 450K. Even if you add demolition and removal cost, I am sure the house can be replaced around 500K.
    Any idea why insurance companies are estimating it too high?
    Will banks value the home based on insurance quote?
     
  2. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    Usually the other way around, get the bank valuation and it'll show the replacement cost on it.
    When's the last time you had a valuation done?
     
  3. Rajiv Srivastava

    Rajiv Srivastava Active Member

    Joined:
    18th Aug, 2017
    Posts:
    33
    Location:
    Sydney
    Couple of years back. But why is Insurance company being unrealistic?
     
  4. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    How do you know they are being unrealistic if you haven't had a valuation completed recently? Seems like you are basing your assumptions on builder websites not actual builders quotes either.
    Have you tried a few different insurers for comparison?
    If you google there are some calculators that will give you a rough idea of how much building insurance you need.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,101
    Location:
    Sydney or NSW or Australia
    Have you considered that some places are cheaper than others?

    upload_2019-7-11_17-26-37.png

    @datto's place vs:

    upload_2019-7-11_17-28-34.png

    @Car tart's ex-wife's place
     
    Last edited: 11th Jul, 2019
    craigc, Stoffo, TMNT and 1 other person like this.
  6. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    6,675
    Location:
    Mt Druuiitt

    Heck. I got more fibro than that.

    I can just make out the neighbour's lawn in that photo. Looks like it needs a little trim lol.
     
  7. Car tart

    Car tart Well-Known Member

    Joined:
    16th Sep, 2018
    Posts:
    917
    Location:
    Sydney-Melbourne
    EX- wife not wife.
     
    Last edited: 11th Jul, 2019
  8. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,101
    Location:
    Sydney or NSW or Australia
    Fixed. ;)

    Note to @datto - there's no grass to cut at @Car tart's ex's place but there's probably a pool which needs cleaning.
     
    datto likes this.
  9. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    6,675
    Location:
    Mt Druuiitt
    If you look hard enough you will always find some grass.
     
    Scott No Mates, Stoffo and Car tart like this.
  10. Car tart

    Car tart Well-Known Member

    Joined:
    16th Sep, 2018
    Posts:
    917
    Location:
    Sydney-Melbourne
    Actually she lives in a $3+ million dollar home, very very close to Mt Druitt, plenty of lawn and an indoor pool.
     
    Scott No Mates likes this.
  11. TMNT

    TMNT Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    5,572
    Location:
    Melbourne
  12. Hosko

    Hosko Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    293
    Location:
    Victoria
    What if they estimated too low, you took that as gospel and went with that number, your house burns to the ground and you are under insured?
    If you reckon yours is $500k can you run with that and see what happens?
     
  13. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,101
    Location:
    Sydney or NSW or Australia
    You could get a quantity surveyor to prepare an estimate of the insurable value and present that to your broker (I do and update that amount every 3-5 years).
     
    Hosko and Islay like this.
  14. Islay

    Islay Well-Known Member

    Joined:
    28th Jul, 2018
    Posts:
    845
    Location:
    somewhere
    We did this after a major Reno. It draws a line in the sand for the insurers and there is no discussion about over/under insurance if something were to happen. The house is an unusual build on a steep block.
     
    Hosko likes this.

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia