Pushing back on insurance value requests?

I'm currently refinancing all 10 IPs that I own with BOQ and Virgin (also BOQ), now the very last thing they want is insurance certificates of currency that I feel are very excessive.
For one, they want the insured sum to be $5,000 more than the valuation and in another $55,000 more than the valuation.

Surely this can't be right, can it?

 

Are you talking about the building insurance correct? You do know the build cost for replacement have gone up?

 

That's a pain of refinancing. Having said that it's the duty of the insured to ensure the replacement costs are up to date according to policy PDS.

 

Usually this can be done as a condition of settlement, but I'm having trouble coming up with a lender that doesn't want to verify the insurance is in place.

It's something that has come in over the last few years.

 

Insurance is in place, but not in excess of what the place is valued at. Seems a bit of a crazy requirement to me.

It still seems silly to me to require insurance that is more than the value of the property. If insurance value + land value > assessed value, surely that's sufficient.

 

Bloody hell, MB came back to me and said it has to be the replacement value.
Looks like from now on, being an arsonist is a qualifying criteria for becoming a tenant, as I'd be up to $200k better off per property if they burnt down. This is madness!

 

increase it. get the certificate
settle
change the sum insured amount back

 

If the insurance value they want is more then whats noted on the valuation report, it does seem a little silly and you would question where they got this amount from.

Alternatively just get the insurance amount they need and once settled, reduce back to what it was so you could get a pro rate refund back for the difference.

 

Most building insurance covers more than just the rebuilding costs.

There is demolition and removal of debris, council approvals, possible upgrades due to changes in building requirements, rental costs for up to a year while rebuilding etc.

Read carefully what is included.

 

It is always replacement value for insurance.
My 2022 building insurance value at a min. is $250,000
Even thought my IP house that is ready for knock down and replace any moment shape.

Note: Don't try to burn down your place. OKAY!

 

He who has the gold makes the rules.

 

Costs a lot more to build a new house than the value of a well depreciated asset.

NeK was on the right track if you really must ^^^^^^.

 

Is that all, the insurance on one I just got finance on was 300k over what they just valued it for. On another they wanted they wanted 100k over. The insurance company, the same bank, stuffed up and issued a certificate of currency at the same value as the old amount ,100k less than they said they needed but approved the loan any way.

 

In the scope of things, you're not talking having to pay $000's extra for a small increase in policy values. If it were a large jump (get a couple of quotes at different values) then increase the excess.