How to work out your rebuild cost
Too low, and every claim shrinks.
Get it right, then check it every year.
Your rebuild cost is the figure your buildings insurance is based on. Here is what it means, what happens if it is too low, and how to get an accurate figure.
What is a rebuild cost?
The rebuild cost is what it would cost to rebuild your property from scratch, including demolition, VAT, site clearance and architects’ and surveyors’ fees. It is not the market value and not what you paid for it. For older, listed, thatched or stone-built properties it is often considerably higher than market value.
What happens
if it’s too low.
We must use the figure you give us. If it is too low, your insurer can reduce a claim in proportion to the shortfall. A 40% shortfall can mean 40% taken off any claim, including small ones.
A worked example
A home that would cost £500,000 to rebuild is insured for £300,000, so it is underinsured by 40%.
A £20,000 escape of water claim could then pay out £12,000, leaving you to find the other £8,000.
How to get
an accurate figure.
- If you’re confident in your figure, check it still reflects any extension or alteration since it was last set.
- If you’re not confident, we strongly recommend a reinstatement cost assessment by a RICS-regulated surveyor.
- For a listed, thatched or non-standard property we consider a site visit necessary rather than a remote or desktop report. The features that drive the cost can’t be seen from photographs or aerial imagery.
- Review your rebuild cost at every renewal, and whenever you extend or alter the property.
Finding a surveyor
You can find a RICS-regulated surveyor in your area through the RICS directory at dir.rics.org. We don’t receive any payment from surveyors and we don’t have a panel. The choice of firm is entirely yours, and your contract will be with them.
If you’d rather talk it through first, call us on 01832 735388 and we’ll explain what to ask for.
Let’s talk about
the cover you need.
Tell us about your property and we’ll help you understand the options available.