REBUILDING
OR REPAIRING YOUR HOME- HOME BUILDINGS INSURANCE
REPLACEMENT
POLICIES
If
the insurer agrees to pay a claim, a replacement
policy means it will pay the cost of rebuilding or repairing
any part of your home that suffers loss or damage. It will be rebuilt
or repaired so that, as far as possible, it is returned to its former
state. Where possible the insurer will match building materials and
such. Under a replacement policy the insurer will pay the smaller of:
- the reasonable
cost of rebuilding your home, or
- the reasonable
cost of repairing your home.
The
insurer will pay only the costs which you actually incur. Under a
typical policy, you must start rebuilding or repairing your home
within 6 months from the date on which the loss or damage occurs
unless the insurer agrees in writing to a longer period. It reserves
the right to pay the builder directly.
Under
a
replacement
policy the
insurer may apply depreciation and cash settle a claim if you:
- have under
insured your home.
- choose not to
rebuild or repair your home, or
- do not start
rebuilding or repairing your home within 6 months from the date on
which the loss or damage occurs (or a longer period on which the
insurer has agreed to in writing).
Any
depreciation applied will be based on the age and condition of your
home.
If
you have a
replacement
policy,
you may rebuild or repair your home in any way you like. In
rebuilding or repairing you may change the materials, plan,
specifications, or size. If you have to rebuild your home, you may
also change the site. If the changes to materials, plans,
specifications or size increase the cost of rebuilding or repairing
your home, you will have to pay the difference. Under this section of
the policy the most the insurer will pay is the sum insured.
See
building
fees and related expenses
Compare
with
Indemnity
policies
If
the insurer agrees to pay a claim, an indemnity policy means it may
apply depreciation before we make any payment. The insurer
reserves the right to decide whether to:
- rebuild or
repair your home
- pay you the
reasonable amount it would cost to rebuild or repair your home, or
- pay you the sum
insured.
Under
this section of the policy the most the insurer will pay is the sum
insured.