If a fire ravaged through our home, completely destroying it, would I have enough cover to rebuild? This is the question that challenged my mind as I read a recent letter from our bank.

Their standard correspondence reminded me that while my mortgage was still held by them that I would need to keep my home insurance current and at its 'fair value'.

Now, understand that the fair value of our property has increased more than 300% over the past 3 years. Most of this increase has come from soaring land prices while 2/5 of the price would be the cost of rebuilding an equivalent home.

Yet our insurance company doesn't want to insure us just for the house. They want to know the total value of the property and then charge their premiums based on that amount.

Which beckons the question, "Why am I paying insurance on a piece of land?" Unless a nuclear bomb lands directly on my home and the area can never be rebuilt there are few reasons why the land will not retain its full value even after the house has been destroyed.

I have yet to phone my insurance company about raising the 'fair value' of our home but after raising this one with them before I know I'm not going to come out with much of a win.