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Expert QA

Kevin Milne: House insurance

How do you value your house for insurance?

By Kevin Milne
I'm confused about how to value my house for insurance. Some experts say you should use a quantity surveyor, others recommend the insurer's online calculators, but err on the high side. Some claim the second option is better, as it's cheaper to pay an extra premium than use a good quantity surveyor. What do you think?
In my opinion, the best option is to use the insurer's online calculator, but use it carefully and definitely err on the high side. If you don't know the exact answers to the questions in the calculator, you must find out. Don't guess. If you need to pay for a builder's report or bring in an expert to answer those questions, you may as well hire a good quantity surveyor to value your house.
If you do know the answers – the types of materials used, the precise measurements of rooms, etc – use the calculator, but insure for significantly more so there's a buffer for error. If you haven't had to pay for a good quantity surveyor, you will have saved about $500 to $1000. I would buy an extra 30% of cover with the money you've saved.
You will find that buying an extra 30% or 50% cover does not cost an extra 30% or 50% in premiums. That's the only pleasant surprise from insuring your house these days. Premiums have gone up, and I believe they're going to rise substantially in the next year or two. As for those who warn not to over-insure, I reckon, in these uncertain times, that's the least of many evils.

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