13sep sum insured house hero
Research report
3 September 2013

Sum insured house insurance

What does the move to sum insured house insurance mean for you?

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Robert V.
14 Jul 2018
Sum insured house insurance a rort

The demand for house owners to calculate their own replacement or rebuilding cost is unfair. Insurance companies have the experience and historical case evidence to do it better than home owners. Some people have been persuaded to pay huge sums to get estimates from so-called professionals (and it remains to be seen if these firms can be held to account in the event their estimates are too low) thus effectively doubling or more the price of insurance. And as you point out thousands of people may now be under insured. The insurance companies are best placed to do this and should be selling replacement policies only.

Henry B.
05 Nov 2015
What if you are happy with different building materials from the ones used at the time of the original construction?

Using the calculator and simply changing the date of construction from 1920s (when it was actually built) to post 1970s - and leaving everything else the same - reduces the sum insured figure by $200,000. Isn't it likely that most people would opt to have their houses built of current materials rather than try to replicate the materials used at the time of construction? Are there other issues to consider in this situation?

Previous member
06 Nov 2015
re: What if you are happy with different building materials from the ones used at the time of the original construction?

Hi Henry,

Thanks for your comment. You may find the premium difference on a reduced sum-insured figure to be very small and really not worth the risk of potentially under-insuring your property and ending up with not enough to rebuild your home to the same specifications, or having to pay out of your own pocket. You also need to think beyond a total rebuild situation. If your 1920s property was partially destroyed by fire and you wished the repairs/rebuild to be of equivalent standard and style to the remainder of the property would you have sufficient cover for that to happen?

And if you're concerned about the premium cost, you could look at increasing your excess. Have a chat with your insurer about what your policy covers with regard to rebuilding to your current specifications.

Kind regards,

Kate Sluka
Finance Writer

Previous member
10 Aug 2014
One calculator for them all...

It is interesting to see the variance between the four insurance companies estimates as they are all powered by the same Cordell calculator. As does ANZ, Westpac and Lumley.