What’s your home’s rebuild cost?
When you’re looking for home buildings insurance, you’ll need to submit an estimate of your home’s rebuild cost—the total amount it would cost to rebuild your home from the ground up. It’s the maximum amount your home insurance policy would pay out, following the total destruction of the property.
The rebuild cost of your home is unlikely to be the price you paid for the property or its current market value. You can roughly estimate the rebuild cost with a bedroom-rated insurance policy or use a blanket cover policy, providing very high or unlimited cover. However, you’ll likely be overinsured with these policies. Giving an exact figure for the rebuild, from an online calculator or chartered surveyor, and getting a sum insured policy can reduce your premiums.
In This Guide:
- How do you calculate the rebuild value of your home?
- What are blanket cover and bedroom-rated insurance policies?
- What is included in the rebuild cost?
How do you calculate the rebuild value of your home?
Sum insured policies require you submit an accurate estimate of the rebuild value of your home. Unless you’re an architect, builder or surveyor yourself, you’re unlikely to know this figure or be able to easily calculate it. Luckily, there’s assistance at hand.
You can use the provided by the Building Cost Information Service (BCIS) of the Royal Institution of Chartered Surveyors (RICS).
To use the calculator, you’ll need to input your home’s external floor area, in meters, for the downstairs and all upper storeys. To calculate this figure, go outside and measure the length and width of the ground floor walls and multiply these together. If the footprint of upper levels is the same, you can simply double or triple the resulting figure, depending on how many additional storeys you have. If it’s different, you’ll need to calculate the floor area of the upper storeys separately and add them.
The rebuild cost calculator has its limitations, however. It can’t be used for historic or listed buildings, which have to be rebuilt with traditional materials, using traditional methods—often at great expense. The rebuild cost calculator also assumes the building is made of brick, so won’t be of use for buildings constructed of other materials. Similarly, the cost calculator won’t provide a good estimate for flats and maisonettes.
In these cases, you can hire a chartered surveyor to perform the calculations for you, at a cost of around £250. They’ll take detailed measurements of your home and prepare a professional Rebuilding Cost Assessment. You can find a local surveyor through RICs.
Because the cost of rebuilding your home will likely increase over the years, as the costs of building materials and labour fluctuate, it’s best to choose an index-linked policy, which will adjust the total sum insured based on inflation.
What are blanket cover and bedroom-rated insurance policies?
If you don’t want to calculate the exact rebuild value of your home, you can opt for either a bedroom-rated policy or blanket cover.
With bedroom-rated insurance, the insurer estimates the costs of rebuilding your home based on the number of bedrooms. With blanket cover, you’re insured for a very high or even unlimited sum.
While both types of policies eliminate the need for close calculations of building costs and the risk of underinsurance, they’re also likely to overestimate the rebuild cost—and consequently drive up your premiums. You’ll minimise your insurance costs by choosing a sum-insured policy, with an accurate estimate of the rebuild cost.
What is included in the rebuild cost?
The rebuild value of your home won’t be the price you paid for it or the price you’d ask for it now. It will include the cost of all materials, from the foundation to the roof; architects’ fees; the labour of skilled tradespeople, from builders to electricians; and possibly cost of clearing the site of the damaged structure.
Homes built of non-standard materials, such as concrete or timber rather than brick, will typically be more expensive to rebuild. Listed or historic buildings, which need to be rebuilt with traditional materials and by tradespeople trained in traditional skills, can have particularly high rebuild costs.
In some cases, the rebuild and repair cost of these properties is so high, you’ll need to seek out a specialist insurance policy—for example for listed buildings or properties with thatched roofs.