Home Insurance, Personal Finance, Personal Finance-News - Thursday, April 10, 2008 20:42 - 0 Comments

Are you paying too much for house insurance?

LONDON (Reuters) - Almost a third of people could be over-insuring their homes in the mistaken belief that rebuild costs are the same as or even more than the purchase price, research shows.

 One tenth of householders believe it would cost the same to rebuild their home as it would to buy and 20 percent think it would be higher, price comparison Web site Confused.com told Reuters.

 That error could mean 30 percent of them are taking out more buildings insurance than they need.

 Rebuild costs can be less than half the value of properties on the open market, which take into account the cost of the land upon which they are built.

 For example, a semi-detached house worth around 180,000 pounds and measuring 742 square feet with a garage would cost 85,700 pounds to rebuild if it was located in the southeast of England and 79,700 pounds in the northeast, the difference owing to labour and material costs.

 Debra Williams, managing director of Confused.com, said: "The fact that one in three consumers consider rebuild cost to be the same as purchase price is unprecedented, and could see them paying over the odds year-on-year.

 "Being financially savvy certainly pays; not only does it mean that consumers can gauge whether they are paying an acceptable amount for insurance, but they are more likely to shop around for lucrative deals if they feel that they are being sold short."

 The research is based upon hundreds of thousands of insurance quotes given by Confused.com over a six-month period.

SOURCE:Reuters