My home insurance renewal letter came in the post today. I called the AA, who have my car policy, and they gave me a quote that was half what Bank of Ireland were charging for the same terms. So I rang the Bank of Ireland - the insurance guys first. They told me that one way to reduce my premium would be to reduce the rebuild cost of the house. So I said OK, but wouldn't the mortgage guys be upset with me for doing that? She said that while I was right, it wasn't their concern, but I should probably talk to them (the mortgage people) first. Property values had come down, so rebuild costs would too.
They suggested I consult the Chartered Surveyors Website, who had a guide to proper insurance, and a table in the guide indicating what the likely cost of rebuilding a house is (on page 3). It varies around the country, but in Dublin it's €164 per square foot, and in the rest of the country around €124, to rebuild a detached house like mine. In 2006-7, when getting quotes to build my house, the prices ranged from €85 to €95 per square foot. This is extraordinary. If the pillar bank is relying on these valuations, they're absolutely nuts. Bonkers. La la la la la. Prices for rebuild have probably fallen in the last few years, and direct labour costs would be significantly lower again (and given my experience building my house - not that the builder was bad, he was great - I'd probably be able to do that if I had to; which would be even cheaper because of the extent to which cash now dominates the building trade). Of course it means that insurance premia are inflated, and that means more money for then banks and insurance companies, who are very innovative in finding ways to screw you. But that was only the start of it.
I thanked her for her advice, and rang Bank of Ireland Mortgages. They advised me to look at the SCSI website as well, and then said I needed to get a new valuation done on the property in order that my house rebuild estimate - and therefore insurance costs - be reduced. I asked who should do the valuation, and she said it didn't need to be anyone on "the list". the conversation that followed was extraordinary:
Me: "I'm not sure I follow - can anyone do it?"
BOI Lady: "Well, someone qualified, obviously."
Me: "What qualification do you mean?"
BOI Lady: "Well, an estate agent, or auctioneer, or valuer, you know."
Me: "But you don't need any qualification to be an estate agent or auctioneer."
BOI Lady: "Well, it must be someone working for an estate agent"
Me: "What about my sister in law, she's temping as a secretary for an estate agent in Offaly, would she do?"
BOI Lady: "No, well, I mean, I know some people who work for estate agents aren't qualified, but it needs to be, you know, someone qualified"
Me: "But - you don't need to be qualified in anything to be an estate agent"
BOI Lady: "well..."
Me: "Look, I've a friend who used to be an estate agent, could he do it? I could just throw him twenty quid, you know, that'd do."
BOI Lady: "Well it must be sort of official, you know? On letter paper and all that"
Me: "Oh, sure he has letter paper."
BOI Lady: "But if he's not in business..."
Me: "He has a registered company"
BOI Lady: "Oh that's fine then, if he has a registered company"
Me: "Thanks, I'll do that so."
And there we have it folks. the valuation of my mortgage - that you all are on the hook for - can be based on whatever my mate Charlie thinks if I buy him a couple of pints down the pub. I reckon the value of my house will have fallen even more significantly than the national average, don't you?
Of course, the interesting thing is that as people re-value their homes for insurance purposes, will these new valuations register with NAMA, or the NTMA? Not a hope. Complete disconnect. It's all a con, the whole lot of it.