ᐅ Reconstruction After Fire – Are the Costs Justified?

Hello 🙂

Our house burned down a few months ago. It had to be rebuilt down to the foundation walls. So far, so good.
The house was built in 1936 and is just a typical single-family home. Now we have received a complete restoration quote of over €350,000.
Roof, facade, insulation, masonry, windows, etc. Everything, basically. ^^
Now the question is, is this price justified? Our insurance agent was nearly shocked and can’t believe it costs this much. The masonry alone costs €70,000, which is more expensive than the roof.
So now the question is if this is a rip-off or if prices have simply risen this much nowadays.
Until now, we didn’t have any concerns because everyone said it was all fine and proceeding as expected. But now the insurance coverage is not enough, and everything is on hold for the time being. It’s not too bad because the fire department couldn’t extinguish the fire properly since no water came from the hydrant, and the city has to take responsibility for that (according to the police, it was not an isolated case, and we were advised to contact the city). This was even covered in the newspapers because of water pressure issues.
We actually wanted to avoid all this because now we’ll probably have to go to lawyers, and everything will take ages...
I just wanted to hear your opinion. So far, the project manager has handled everything, including finding the companies and so on. And now this...

Another question: is it even worth it, or would it be cheaper and easier to build a prefab house? Or to completely demolish everything and rebuild from scratch?
Or would that not be much better cost-wise either?
The house should be around 160m² (1722 sq ft), with bedrooms, bathroom, kitchen, living room on the ground floor, and living/bedrooms upstairs. It should all cost around €250,000.
We have no experience with this kind of thing. We also heard that prefab houses can have many hidden costs.
Our insurance company is coming again on September 17th. So the question is in which direction we should go: rebuild or new build?

I hope someone can help us and maybe answer some of our questions... the whole thing has become a bit more complicated ^^

Unfortunately, I have to tell you quite generally: prices are like this today, you won't be able to avoid them, and a prefabricated house is not cheaper than one made of brick.

I would steer it in the direction that is better for you; I don’t think you will save money with either option if the house is completely destroyed anyway...

Hmm, you have insurance, and according to your statement, the city is also liable. So I don’t understand why you are worrying. Is your insurance broker retired? Or is he still earning his living with very low fees? The insured amount is one thing; the description of what you are supposed to get is another. Usually, it means that the property has to be restored to a habitable condition, and that standard is from 2018. I wouldn’t reduce anything or try to negotiate with the insurance or the city either. I would also include all new technology, possibly covering that cost yourself. After all, you are basically getting a new build. But it’s an interesting topic. Please hire a qualified lawyer to handle everything! It is clear now how important it is to regularly review your insurance terms. 100,000 DM is simply not worth anything anymore.

The price is about right for 160 sqm (1,722 sq ft). AI additional construction costs.
It will be a new build with a basement anyway, as I understand it?

Don’t worry and order your house from the insurance company.

Well, the problem is that he is underinsured.
The city will not pay voluntarily either; there will be a long legal process involving numerous expert reports.
If the fire department had extinguished it, everything would have been damaged by water anyway, so it doesn't make much difference.
I wish you good luck in ending up with a relatively minor loss.

Where does he say he is underinsured? Depending on how old the policy is, it is almost impossible for him to be underinsured, thanks to the sliding replacement cost factor or construction cost index, etc. For example, if he took out the insured sum based on values from 1914, the system would have calculated a more or less precise value. Unless the advisor manipulated it to get a cheaper premium, I rarely see underinsurance issues with the WOG...

As others mentioned, the insurance reimburses the house to the same type and quality according to current building standards. If you had 160 sq meters (1,722 sq ft), you will not get 200 but also not 120. Whether the insurance seeks recourse against the municipality then doesn’t really matter to you 😉