What to do if your builders quote is higher than your insurance offer
It's a common and stressful situation. Your insurance company gives you a repair payout, but your builder's price comes in significantly higher. So who's right, and what are your options?
As a Quantity Surveyor, I help homeowners across New Zealand navigate this exact issue, and the good news is there is often a clear path forward.
Why the Discrepancy?
Here are some reasons the builder's cost can come in higher than the insurer's offer:
Insurer quotes are often generic or desktop-based. They may not reflect site conditions or regional pricing.
Builder pricing includes realistic costs. Labour shortages, access difficulties, temporary works, and margins all add up.
Insurance quotes may exclude necessary work. For example, flashing, finishing, moisture protection, scaffolding, and reinstatement.
The scopes differ. The insurer might allow to patch, while the builder quotes for a full rebuild of that area.
What You Can Do
1. Get a full scope of works from your builder
Ask your builder for a detailed scope that explains what's included and why. This helps clarify any misunderstandings and allows for a fair comparison.
2. Compare apples with apples
Make sure the insurer and builder are pricing the same scope. Sometimes the insurer only quotes for the minimum, while the builder includes full reinstatement.
3. Engage an independent Quantity Surveyor
An independent QS provides:
A professional cost report using real-world pricing
A side-by-side comparison of builder vs insurer
A report to support dispute resolution if needed
Clear language to help everyone align on actual costs
4. Challenge the insurance offer (with evidence)
Using the QS report, you can formally challenge your insurer's offer and request a reassessment. Many clients see their settlement revised upward once real costs are presented.
5. Use the IFSO or legal support if needed
If your insurer refuses to revise the offer, the Insurance & Financial Services Ombudsman (IFSO) may be able to assist. Your QS report becomes crucial evidence.
Real Case Study
"Our insurer offered $88,000 after the storm. The builder quoted $119,000. With Lance's QS report supporting the builder's numbers, the insurer increased their payout to $113,500. That difference made the rebuild possible."
Key Takeaways
Builders' prices are often more realistic than insurer estimates.
Get a QS report to fairly validate the real cost of the work.
Don't accept the first offer if it feels too low. Question it.
You're entitled to be restored properly, not cheaply.
Need Help?
We prepare costed insurance reports to support homeowners, brokers, and builders NZ-wide.
Contact Lance at lance@measured.co.nz.