‘How much would it cost to rebuild your property?’ is a common question when completing an insurance application. Unfortunately, it is also commonly a question that people do not know the answer to. Luckily there are a number of methods that you can use to calculate this, ensuring both that your house is adequately covered and that you are not paying over the odds for your home insurance.
Why is an accurate rebuild figure important?
As touched upon above, making sure that you have as accurate a figure as possible for the rebuild cost of a property is important for a number of key reasons. This starts with the importance of not underinsuring the property, the reason for which is obvious. In the event of catastrophic damage to the property that results in the need for it to be completely rebuilt, if the insurance value isn’t high enough to cover this then your client will be left with a hefty bill to cover the difference themselves. Although insuring for a lower value may seem like a good idea at the time with the aim of saving a few pounds, it is never worth the risk.
Equally, if you choose to vastly over-insure a property, you will end up spending far more money than is necessary. Monthly or annual payments will be much higher than if you had simply insured for the required figure. Plus, the insurance company will only ever pay out the amount the home costs to rebuild, even if its covered for more than this. For this reason, overpaying for insurance cannot be seen as a form of a savings account where you can later reclaim the difference!
How much would it cost to rebuild a house?
There are a number of methods that can be used to obtain the correct rebuild value of a property. The most accurate of these is obtaining the help of a registered surveyor who will be able to carry out a full survey. There is however some cost associated with this option, with the average survey costing around £250. Despite this, lots of people choose this option because of the peace of mind that it provides in relation to their rebuild costs. Taking away any element of guesswork means they can be confident that they are adequately covered.
Having some form of written confirmation is certainly the most reliable way of knowing a property’s rebuild cost. However, it is not always necessary to commission a new survey to obtain this. If the home was purchased using a mortgage then it is likely that the mortgage survey report will contain this information. It is also possible that the property deeds will be able to tell you. It is certainly worth consulting any documentation the property owner owns which relates to the property before consulting any more expensive options.
If neither of these options are open to you then there are still ways that you can work out the property’s rebuild cost. One of these is the use of the BCIS rebuild cost calculator, which is what Source uses with our online insurance platform to help you calculate the rebuild cost. This tool can take your basic property information and automatically calculate an approximate sum.
There are therefore a number of options available to help work out exactly what the rebuild value you should be entering for the property and at Source our team of property insurance experts are on hand to answer any queries you may have.