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You need to know the rebuild cost of your house to get home insurance quotes - so here’s how to work it out.
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It’s how much you’d need to pay to completely rebuild your home to its existing design and specification if it was destroyed by an event like a fire or flood.
According to Defaqto, 97% of 303 buildings-only policies had a maximum building value of £300,000 or more.[2] House prices are usually more than the rebuild value, so most policies seem to offer more than enough to cover your rebuild costs.
The figure will include the cost of materials and labour. It should also factor in other associated expenses including:
Buildings insurance covers damage to the fabric of your home. This includes the:
If your home was destroyed by a catastrophic event like a fire or flood, your buildings insurance would cover the cost of rebuilding your property from the ground up.
So, when you get quotes for insurance, providers want to know the rebuild cost so they can calculate your premiums based on that sum.
The rebuild cost is called the ‘buildings sum insured’ in the policy booklet. It’s the maximum amount your insurer would pay out for a claim and should be enough to cover the full rebuilding cost of your property.
It’s important to calculate your rebuild costs as accurately as possible and check you’re insured for the right amount. That way, you won’t have to fork out for any shortfall because you’re underinsured. It works the other way too, of course. If you overestimate the rebuild cost of your home, you could be paying a higher premium unnecessarily.
Remember that you may need to adjust the buildings sum insured on your property over time. Renovation work and extensions can increase the rebuild cost, as can changes in the building materials used. So you need to let your insurer know about any building work. Your premiums may need to be recalculated as a result.
No, these are different things.
The rebuild value is what it’d cost to rebuild your home from scratch, from the ground up. The house value, or market value, is the price your home would sell for on the current property market.
Your property’s market value is likely to be higher than the rebuild cost because it includes the cost of the building, as well as the land it stands on. It also factors in the location and local amenities.
So make sure you base your buildings sum insured on its rebuild costs, not the current market value, or you could end up overinsured and paying more than you need to.
The rebuild cost can be broken down into two main factors:
You can usually find the rebuild value in:
We can help you calculate your house rebuild cost using the Building Cost Information Service (BCIS) when you compare buildings insurance.
According to Defaqto, 97% of 303 buildings-only policies had a maximum building value of £300,000 or more.[2] House prices are usually more than the rebuild value, so most policies seem to offer more than enough to cover your rebuild costs.
Rebuild costs can change over time, so if you’re not sure whether you still have an accurate valuation you can use the BCIS's rebuild cost calculator.
Alternatively, you can hire a chartered surveyor to evaluate your home and prepare a reinstatement cost assessment. It’s not cheap, but it could be worthwhile if you want accuracy.
All sorts of factors affect a property’s rebuild costs including:
This is the maximum amount that your insurer will pay out to rebuild your home from scratch.
It’s not the current value of your home or the price you paid for it.
The sum insured will be stated on your home insurance policy - check that it’s enough to cover a rebuild of your property or you’ll have to pay the shortfall yourself.
Some policies provide an unlimited buildings sum insured, so you don’t need to specify the rebuild costs.
Yes. If you add an extension, loft conversion or make structural changes to your property it could increase the rebuild cost.
You must let your insurer know about these changes so that your premium can be adjusted.
Find out more about home renovations and home insurance.
If you underestimate the rebuild value of your home, your insurer may not pay the full cost of repairs if you need to make a claim.
For example, say you’ve told your insurer the rebuild value of your home is £100,000, but when it comes to claiming you discover the rebuild will actually cost £150,000.
Unfortunately, your insurer will only pay out the £100,000 figure you told them - so you’ll end up losing out.
“Overvaluing the rebuild cost of your property could mean that you’re paying more money than you should be for your home insurance, as your insurer will only ever pay out for the cost of the rebuild regardless,” says Go.Compare’s home insurance expert, Ceri McMillan.
The market value of your home is usually more than the rebuild cost, so don’t rely on that figure.
The rebuild cost of listed properties and those constructed from non-standard materials may be more expensive than for a regular home.
This is because of the costs associated with replacing materials such as thatched roofs, as well as having to hire specialist professionals.
If you own a flat as a leaseholder, it’s unlikely you’ll be responsible for arranging buildings insurance. It’s usually up to the freeholder. You and the fellow leaseholders usually pay towards it in the form of a service charge.
But if you own the freehold for your flat, or a share of the freehold, then it’s your responsibility to buy buildings insurance. It could be a good idea to get a professional rebuild valuation from a chartered surveyor for a block of flats.
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[2] Last checked 24 May 2023