Insurance and banks

[Beano]

How have you found the bank view when it comes to insurance ?

1: If the building forms only a small portion of the value of the property and contributes little income vs the land value and providing the income have you found the bank willing to forgo the right to insist on insurance
2: Where you cannot obtain replacement insurance like for commercial in Wellington have the banks been fussed on insurance.
3:Calculating Indemnity value what is your formula ?
I treat it Indemnity as what the building is worth ie Total Property worth less land value (land has been cleared otherwise deduct demolition cost) ...so could be very little
4: do the banks look at the mortgage value so the insurance covers this ? IE the insurance pays off the loan
Individual property and total group holdings ?

[hawkeye]

We had a disagreement like this as the land was worth more without the house which was an old villa! In the end they agreed to cover us for indemnity for the value on the CV. Because we had a valuation with the combined value on it we were able to get a mortgage based on the valuation. It was destroyed in the earthquakes and we then paid out based on the indemnity amount per event so it ended up being more than the original SI. Make sure you read the insurance policy carefully to see what it covers. We found out later that we could have asked to swap to replacement cover after we did some renovations as it was on our file which we asked for under the privacy act so each year when you renew ask to increase the cover to replacement value and they may let you if you have done improvements.