Building insurance value calculations

[WAslayer]

The estate agent referred us.

There is your problem.. Anything and anyone referred by an estate agent should be avoided at all costs..

 

[SauRoNZA]

It's a cash purchase so we pretty much had to do all this on our own. No bank was involved. The estate agent referred us to a broker who got 3 quotes for us, and we went with that as Old Mutual is a well-known brand.

Aah that somewhat explains where it likely went off the rails then.

Old Mutual is a terrible short term insurance company.

Life insurance sure, but skip it for all the rest.

 

[Tomtomtom]

Yeah but that calculator is just a loose calculation.

I doubt it's so loose as to be out by a factor of 4. Rebuilding is going to be a relatively flat cost country wide (with some variation obviously) but there are empty plots in some areas that are worth more than a mansion somewhere else.

When I first queried their valuation I was told that they have just over R1mil for demolition and site clearance. So it's not only the cost to rebuild that comes into it.

I love that. Where do you live in SA that "site clearance" is not a free service for half of your house's materials. And a few grand for the rest for someone to take and dump in a river somewhere.

 

[cavedog]

There is your problem.. Anything and anyone referred by an estate agent should be avoided at all costs..

Aah that somewhat explains where it likely went off the rails then.

Old Mutual is a terrible short term insurance company.

Life insurance sure, but skip it for all the rest.

Yeah I guess lesson learned the hard way. Will try and see if the insurance is willing to pay a bit more if not we will take it and look for something else and get a proper quote for the correct amount. We just got solar installed so don't want it to be under insured and then when this happens we end up out of pocket again. Sigh

 

[Tomtomtom]

OP get a broker and don’t do this direct stuff, then you wouldn’t have these problems.

Looks about right then. Broker screwed us.

What communications did you have with the broker over the valuation? I'm assuming they just accepted your figure. I would have thought it would be a professional license condition that they actually engage with you over that and do some due diligence to satisfy themselves you are well informed... but then again maybe not.

They add increasingly much of nothing each year. Direct all the way.

 

[cavedog]

What communications did you have with the broker over the valuation? I'm assuming they just accepted your figure. I would have thought it would be a professional license condition that they actually engage with you over that and do some due diligence to satisfy themselves you are well informed... but then again maybe not.

They add increasingly much of nothing each year. Direct all the way.

We didn't give them numbers. We went to their office with all the documents including coc for the electrical and electric fence etc and said we want build and household contents insurance for this property. It was bought cash. The transfer just went through. They said no problem we willed some forms for the details address etc signed and she said she will email us at least 2 quotes from providers.

Old Mutual is the only one we knew the other names we never heard about and we picked that. Old Mutual sent us their welcoming documentation and info and told us the 1st debit will run in the next 3 business days as we specified, we wanted cover immediately.

That was it. The debit order of R994 per month run each month as normal.

 

[Neuk_]

This is one of the reasons that we recently had our house and contents valued by an approved assessor through our broker. Our underwriter has accepted the valuations and there is little to no recourse based on value should we need to claim for anything. We did have to up our insured values and premiums though but have peace of mind that we are comprehensively insured. I suggest everyone does it as you'll be surprised with especially how much content adds up past what you would expect.

 

[SauRoNZA]

What communications did you have with the broker over the valuation? I'm assuming they just accepted your figure. I would have thought it would be a professional license condition that they actually engage with you over that and do some due diligence to satisfy themselves you are well informed... but then again maybe not.

They add increasingly much of nothing each year. Direct all the way.

Well in this case he can potentially fight with the broker about their bad form who can in turn chirp Old Mutual to fix it forwards and pay the full claim.

If they are worth anything as a broker that is.

When you go direct…once you are ****ed you stay ****ed.

 

[Tomtomtom]

We didn't give them numbers. We went to their office with all the documents including coc for the electrical and electric fence etc and said we want build and household contents insurance for this property. It was bought cash. The transfer just went through. They said no problem we willed some forms for the details address etc signed and she said she will email us at least 2 quotes from providers.

That sounds like professional negligence to me. Perhaps you can take it up with their insurance.

They don't do valuations themselves, but a broker is supposed to be an FSCA-licensed professional with a duty of care to you as their customer. At a bare minimum I would have thought they need to check you're aware of the basics of how the product they're setting you up with actually works.

If they didn't even query the valuation, and just gave the insurer your purchase price in lieu of that, that would be crazy.

 

[SauRoNZA]

We didn't give them numbers. We went to their office with all the documents including coc for the electrical and electric fence etc and said we want build and household contents insurance for this property. It was bought cash. The transfer just went through. They said no problem we willed some forms for the details address etc signed and she said she will email us at least 2 quotes from providers.

Old Mutual is the only one we knew the other names we never heard about and we picked that. Old Mutual sent us their welcoming documentation and info and told us the 1st debit will run in the next 3 business days as we specified, we wanted cover immediately.

That was it. The debit order of R994 per month run each month as normal.

Bit weird that Old Mutual would deal with you directly and send you welcoming docs instead of the broker dealing with you.

The behind the scenes insurer is usually pretty much camouflaged by the broker, because half the point of the broker is that you don’t need to go “all in” with one insurer and have multiple for different things.

 

[SauRoNZA]

That sounds like professional negligence to me. Perhaps you can take it up with their insurance.

They don't do valuations themselves, but a broker is supposed to be an FSCA-licensed professional with a duty of care to you as their customer. At a bare minimum I would have thought they need to check you're aware of the basics of how the product they're setting you up with actually works.

If they didn't even query the valuation, and just gave the insurer your purchase price in lieu of that, that would be crazy.

This sounds more like a sales agent for Old Mutual than an actual broker.

You are 100% on the negligence and I would fight this with the broker especially since it sounds like a pretty fresh deal at that.

Even if you have to back pay the premiums to bring it into alignment.

 

[W@P]

Just make sure you don't over-insure, afaik there is such a thing.

Your R6mil insured house, which you bought for R2mil, would cost R3-4mil to rebuild burns down.
They will tell you the exact same kak. You are overinsured, and they only approve a % of the claim.

\Afaik that is a thing.

 

[W@P]

They will take your money no matter what you indicate as value. But when it comes to claiming, they tune wokaaai stop die lorry.

 

[Neuk_]

They will take your money no matter what you indicate as value. But when it comes to claiming, they tune wokaaai stop die lorry.

Yep, my father got an underwriter to pay back somewhere around 4 years worth of premiums on a car because when he claimed after it was stolen they found it was previously stolen and fraudulently reregistered with a different VIN, etc. He told them they can't take his premiums for four years and then deny his claim because he should not have been able to buy the car in the first place.

 

[W@P]

Yep, my father got an underwriter to pay back somewhere around 4 years worth of premiums on a car because when he claimed after it was stolen they found it was previously stolen and fraudulently reregistered with a different VIN, etc. He told them they can't take his premiums for four years and then deny his claim because he should not have been able to buy the car in the first place.

Joh that sounds like a ball ache to sort out.

 

[purrr]

Just make sure you don't over-insure, afaik there is such a thing.

Your R6mil insured house, which you bought for R2mil, would cost R3-4mil to rebuild burns down.
They will tell you the exact same kak. You are overinsured, and they only approve a % of the claim.

\Afaik that is a thing.

It is.

 

[deweyzeph]

Just make sure you don't over-insure, afaik there is such a thing.

Your R6mil insured house, which you bought for R2mil, would cost R3-4mil to rebuild burns down.
They will tell you the exact same kak. You are overinsured, and they only approve a % of the claim.

\Afaik that is a thing.

No, that is not a thing. The worst that happens when you overinsure is that you're pissing money up against the wall for nothing as your insurance will only pay out for your actual loss, not your insured loss.

 

[purrr]

No, that is not a thing. The worst that happens when you overinsure is that you're pissing money up against the wall for nothing as your insurance will only pay out for your actual loss, not your insured loss.

Certainly will raise suspicion into your claim.

 

[Tomtomtom]

When you go direct…once you are ****ed you stay ****ed.

True that, but at least you know where you stand. And they can't be doing less than OP's broker to educate their clients.

 

[Tomtomtom]

No, that is not a thing. The worst that happens when you overinsure is that you're pissing money up against the wall for nothing as your insurance will only pay out for your actual loss, not your insured loss.

Yes, the confusion arises because you're not allowed to profit from loss, so if you try to insure a R 1-million house for R 2-million, and it burns down, you are only covered to the R 1-million.

But if just the roof is damaged by hail say (not a total loss) you will be fine.