A simples guide

How do I calculate the rebuild cost of my home?

Calculating the rebuild value of your home is an essential part of applying for buildings insurance. The rebuild value is the amount it would cost to rebuild your home from scratch at the same location if it were to be completely destroyed by fire, flood or any other disaster. It’s not the same as the price you paid for your home, or the current market value of your home if you were to sell it, and your council tax band also has no bearing on the rebuild cost.


The Cost

The rebuild cost will usually be lower than the market value, as the rebuild cost simply takes into account the cost of labour and materials and does not consider factors such as supply and demand.

If you underestimate the rebuild value and your home is completely destroyed then your insurance may not cover the full costs.

It’s therefore recommended that you use a professional surveyor, who can calculate the rebuild cost for you.

Engaging a professional surveyor is better than trying to calculate the cost yourself, but you should certainly not try and do a DIY calculation if you live in a flat or maisonette, or in a house of non-standard construction, such as one with a thatched roof or one that isn’t made of brick.

If you make changes to your home – an extension, loft conversion, conservatory etc then the rebuild cost of your home is likely to increase, and in these circumstances you should have the rebuild cost re-assessed, and inform your insurance provider of the outcome.

If you over-insure your property, then you’ll be wasting money by paying a higher premium. There’s no benefit to over-insuring as the insurance provider will only ever cover the rebuild cost if your home is destroyed, they won’t pay out the extra amount.

You can use the default figure on our site to get an idea of how much this should cost. This could save time and money on using a surveyor. You can also find insurance that offers ‘blanket’ cover where the insurer offer a set amount (£500k, £1m and sometimes unlimited) which should cover the rebuild cost of your home.

What is buildings insurance?

Buildings insurance provides cover should your home be damaged by fire, flood, other disaster, vandalism, falling trees etc. Some policies will also cover damage due to frost and subsidence. Damage resulting from poor maintenance is unlikely to be covered.

This type of insurance covers the building itself plus the fixtures and fittings in your home, such as bathroom suites and kitchens.

Unless you attempt to calculate the rebuild cost yourself (see above), the process of applying for buildings insurance is fairly simple – you will only need to supply basic information about your home, such as the type of property, its rebuild cost, how many rooms it has and who lives in the property.

If you have a mortgage, the lender will probably insist that you have adequate buildings insurance in place.

You can reduce your premium by installing a smoke alarm and fire extinguisher, installing damp proofing and having your pipes insulated.

It’s not the same as contents insurance, which provides cover for your personal possessions, even though the two types of insurance are often purchased as a package. Essentially buildings insurance covers everything that is fixed in position in your home, while contents insurance covers the rest.

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