Question. House, Insured value???.

[tameriska]

Hi, I have been thinking on this question for a while.
How do you work out how much it would cost to rebuild your house (older style).

When I got my mortgage, and had to estimate what value to insure the house for, I asked my Dad (a builder) what it would cost to rebuild, and he gave me a figure off the top of his head.
I am not sure how he worked it out, or if it was realistic back then, as he just gave me a 2 second guess.

I have had that figure on my insurance for the last 6 years, but am thinking that I should review that figure and make sure that it is up to date.

My house is of 1950's construction, solid limestone with a h i g h tiled roof (could convert into an attic easily, its that high), timber floors, solid hard finish plastered internal walls, large open fireplace, wooden windows and 8' ceilings.

I have the original 1950's cast iron wood stove, which doubles as the hot water service.
A couple of years ago, when enquiring on the price of parts, I asked out of interest, what a similar replacement wood stove would cost, and I was told between 8 and 12 grand.

The local council has long since disposed of my house plans, and I do not have a copy of them

If the worst case ever happened, and my house was destroyed, I do not want to find out that the cost to rebuild was estimated on modern house construction, and be stuck in a low ceilinged, concrete slab'd, gyprock walled box with aluminium windows and mdf architraves.


The questions that I have are:

Is the stove considered part of the house, as it is connected to the plumbing, or are stoves generally considered "contents".

Is there a online service somewhere that I can put in specifications, (timber floors, hard plaster, higher than current ceiling height) and get an idea of the construction costs?

Does the insurance value have to cover the potential cost of clearing the site (demolition) if the house is destroyed and has to be rebuilt, or is it just construction cost?


I could probably measure up, and draw rough plans of the house, and specifications, go to a builder, and ask what he would build the house for, but it seems a but rude to ask them to spend their time working out the price on work that (hopefully) they are never going to get.



How do you work out how much to insure your house for, and what needs to be taken into consideration?

Thankyou in advance for any help and replies.

[Honorary Bloke]

I have the original 1950's cast iron wood stove, which doubles as the hot water service.
A couple of years ago, when enquiring on the price of parts, I asked out of interest, what a similar replacement wood stove would cost, and I was told between 8 and 12 grand.

If the worst case ever happened, and my house was destroyed, I do not want to find out that the cost to rebuild was estimated on modern house construction, and be stuck in a low ceilinged, concrete slab'd, gyprock walled box with aluminium windows and mdf architraves.

How do you work out how much to insure your house for, and what needs to be taken into consideration?.

Of course OZ is going to be a bit different, but I believe some insurance laws are universal.

There are two primary ways to value a dwelling: comparables and replacement cost. Comparables are, as it implies, the cost of similar dwellings in the same or a contiguous area. In other words, what do similar houses in the same area and condition sell for?

The other is replacement cost, or what it would cost to rebuild in today's market. This is where you will come a cropper. Very few insurance companies will insure a home to be rebuilt to the same standard as, in your case, 1950s construction. The codes have changed. The materials have changed. And the techniques have changed. If you wish to insure your house for "exact replacement as built," good luck to you. You will pay a considerable premium for the privilege.

Almost all insurance estimates are based on comparables in your area. That is, what will it cost to replace your house in terms of square metres minus the land value. It will typically include the cost to clean and prepare the site, but it will not include things like your stove connected to the plumbing unless specifically specified. If you are keen on exact duplication, I suggest you consult an insurance broker and take some advice. Unless OZ is very different from the rest of the world, you are going to be disappointed. :(

[q9]

Generally the expensive part of building a house in town is the land. You can build houses from around $130k and go up from there...

[LuckyDuck]

Tameriska:

My uncle is an architect and for what its worth he says new houses generally cost between $1200 and $1500 per square metre to build. The lower end of the spectrum buys a standard house; the upper end gets you some more luxury features (like the stove and higher than normal ceilings). It also depends on where you are geographically. My uncle lives in the bush, and building costs are very high such that the $1500 price is about the same as the $1200 price in the major cities (except Sydney which has silly prices regardless).

Most of us are probably underinsured so its good of you to take it seriously.

PS. I have a standard, 1970s two-storey home, brick, three bedder, 1.5 bathrooms, nothing special, and I have it insured for $250k... hope that helps.

[tameriska]

Thankyou all for your replies.
I have looked at a couple of online calculators, found that they give a lot of variance in the "quotes'
I have no idea if these allow the cost of rebuilding the equivalent "new" house using standard construction methods, or allow for similar construction.

I am glad I was sitting down :o

Now, next question, how do you work out the rough cost allowance for "demolition" /clearing costs of the 'destroyed' house

[LuckyDuck]

I have no expertise in determining amounts required to cover demolition and removal. However I was told approx. 20k would cover it.

For what its worth...