Rebuild sums insured of a property is a difficult thing to work out, and if it’s wrong, you could be left out of pocket in the event of a claim. So, what is a ‘rebuild sums insured’ and how can you ensure that yours is right for you?
Rebuild Sums Insured – What is it, and how do I work it out?
There are all kinds of reasons why a building may not be covered for the correct amount. For example, many people insure for the market value of the property, some take the advice from their mortgage provider, and a few even just guess, but these can result in incorrect figures.
Properties should always be insured for the actual cost to rebuild the structure.
There are two potential outcomes for insuring a building for the incorrect amount. Over-insurance and under-insurance. Let’s begin with over-insurance, which affects around 1 in 5 properties. If you have ‘blanket cover’ then usually, there’s no need to worry, however, if a property is insured on a ‘sum-insured’ basis, then there’s a possibility it may be over-insured, which could mean on average you will paying around 20% too much every year for the insurance. Over the years this unnecessary expense can seriously add up.
Under-insurance can have far more severe consequences. More than two thirds of properties in the UK are underinsured, and an insurance company can limit any claims payments to the figure stated on the policy schedule. If this figure isn’t enough, you’ll be left with the difference, which could mean thousands of pounds.
Something also missed when considering the rebuild sums insured is the clearance of the debris, and potentially alternative siting whilst the property is being rebuilt. The building sums insured should be considered to cover the full consequences of a total loss.
So, what can you do?
The simple solution is to insure for the correct amount. Normally, this involves finding a trusted expert who visits the property to complete a professional assessment. This can be both time-consuming and expensive.
However, at Turner Insurance Group, we work closely with Rebuild Cost Assessment, who offer a unique low-cost online service. They can provide you with a comprehensive report without ever having to visit.
With this service, you will receive a full report backed by RCIS, (The Royal Institution of Chartered Surveyors) of the bespoke rebuild sums insured, confidence that the policy covers you correctly, and peace of mind that in the event that the worse should happen, you’ll get the full support from your insurer.