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Check Whether Your Building Sum Insured Is Still Accurate
Understand Your Building Sum Insured
A Rebuild Cost Assessment helps work out how much it would cost to rebuild your property if it was badly damaged or destroyed. This figure is used for buildings insurance and is different from the market value of your home, rental property or commercial premises.
Getting this figure wrong can cause problems. If your building sum insured is too low, you may be underinsured. If it is too high, you may be paying more than you need to for cover. Either way, an old or guessed figure can create issues when a claim is made.
Independent Loss Adjusters help policyholders understand property insurance claims, including the problems caused by underinsurance, low settlement offers and disputed sums insured. Where a professional rebuild valuation is needed, we may recommend a specialist provider such as Exactum.
What A Rebuild Cost Assessment Tells You
A rebuild cost assessment estimates the cost of reinstating the building, not what the property could sell for.
It usually considers:
- Demolition and site clearance
- Labour and materials
- Professional fees
- Current building regulations
- The age, size and construction of the property
- Garages, basements, outbuildings and extensions
- Access issues and site complexity
- Regional rebuilding costs
- Specialist features, where relevant
This matters because buildings insurance is usually based on the cost of rebuilding the property, not its sale price.
A property may be worth £900,000 on the open market but have a rebuild cost of £500,000. Another property may be worth less on the market but cost more to rebuild because it is listed, remote, unusually built or difficult to reinstate.
Rebuild Cost Is Not The Same As Market Value
Market value is what someone may pay to buy the property. It is affected by location, land value, demand, condition and the wider housing market.
Rebuild cost is different. It is the estimated cost of clearing the site and rebuilding the structure, including labour, materials and professional fees.
This is where mistakes often happen. If a property owner uses market value as a shortcut for rebuild cost, the sum insured may be wrong. In some cases, that can leave the property underinsured. In others, it may mean paying for more cover than is needed.
A proper assessment helps avoid that guesswork.
Calculator Or Professional Assessment: Which Do You Need?
A rebuild cost calculator can be a useful starting point for a standard property, especially if you know the floor area, construction type, age and layout.
However, an online calculator is still only an estimate. It may not be suitable where the property is:
- Listed
- Older
- Extended or altered
- Commercial or mixed-use
- Built with non-standard materials
- High-value
- Part of a portfolio
- Difficult to access
- Affected by unusual construction features
In those situations, a professional assessment is usually more appropriate because it can take account of property-specific features that a generic calculator may not capture. It also provides a clearer record of how the estimated rebuild cost was calculated.
Why The Right Rebuild Figure Matters In A Claim
Underinsurance can become a serious problem when you need to make a claim.
If the insurer believes your building was insured for less than its appropriate estimated rebuild cost, it may seek to reduce the settlement. This is often linked to the average clause, which allows the insurer to reduce a claim in proportion to the level of underinsurance.
For example, if your property should be insured for £600,000 but your policy only covers £450,000, the insurer may treat the property as 25% underinsured. If the average clause applies, a claim payment could also be reduced by 25%.
That can leave you with a shortfall at exactly the point when you need funds to repair or reinstate the property.
This is why an up-to-date rebuild cost assessment can be so important. It gives you a stronger basis for arranging cover and reduces the risk of disputes over the building sum insured.
When To Review Your Rebuild Cost
You should consider reviewing your rebuild cost if:
- Your current figure is several years old
- You are renewing your buildings insurance
- You have extended, altered or improved the property
- The property has been converted or its use has changed
- You own a listed, older or non-standard building
- You are insuring a commercial property or portfolio
- Construction costs have changed significantly
- Your insurer, broker or lender asks for an updated figure
- You are concerned that your current sum insured may be wrong
Even where index linking has been applied to your policy, it may not correct an inaccurate starting figure. If the original rebuild cost was too low, indexation may simply increase an already incorrect number.
What A Professional Assessment Usually Includes
A professional rebuild cost assessment may be carried out as a desktop assessment or an onsite inspection, depending on the property and the level of detail required.
The assessment may include:
- A review of the property type, age and construction
- Measurement or confirmation of floor area
- Review of extensions, outbuildings and additional structures
- Consideration of demolition and site clearance costs
- Professional fees and regulatory requirements
- Current rebuilding rates and regional cost differences
- A written report for insurance purposes
Where appropriate, a professional rebuild cost assessment should be prepared with reference to recognised surveying guidance, reinstatement cost principles and the specific features of the property being assessed.
The aim is to give the property owner, broker or insurer a clearer and more reliable rebuild figure.
How ILA Can Help If Underinsurance Affects Your Claim
Independent Loss Adjusters act for policyholders, not the insurance company.
If you are making a property insurance claim and underinsurance has been raised, we can help you understand what the insurer is saying, what evidence may be needed and whether the proposed settlement appears fair.
We can also help where there is a dispute about:
- The building sum insured
- The average clause
- The cost of reinstatement
- The insurer’s settlement offer
- The repair or reinstatement allowance
- Delays, disagreements or unclear claim decisions
Our role is to help you get clarity, challenge weak assumptions where appropriate and keep the claim moving in the right direction.
Who Should Consider A Rebuild Cost Assessment?
A rebuild cost assessment can be useful for:
- Homeowners who want to check their buildings insurance
- Landlords with rental properties
- Business owners with commercial premises
- Property investors
- Managing agents
- Housing associations
- Estate managers
- Insurance brokers advising clients
- Owners of listed, older or unusual buildings
It can also be useful before a claim arises. Once damage has happened, it is much harder to correct a long-standing problem with the insured value.
Professional Rebuild Valuation Support Through Exactum
Where a professional rebuild valuation is needed, ILA may recommend Exactum.
Exactum provides rebuild cost assessments and building insurance valuations for property owners, landlords, businesses and insurance professionals. Their assessments can help confirm whether the building sum insured is suitable and whether the property may be exposed to underinsurance.
This can be especially useful where a property is older, high-value, commercial, unusual, extended or part of a wider portfolio.
If you need a rebuild valuation before arranging or renewing insurance, Exactum may be the right next step. If you are already in a claim and underinsurance has become an issue, ILA can help you understand the claim position first.
📞 Get Clear Advice Before The Figure Becomes A Problem
A rebuild cost assessment is not just a paperwork exercise. It can affect your insurance cover, your premium and the amount available if you need to make a claim.
If you are unsure whether your building sum insured is still accurate, it is better to check before a dispute arises.
For rebuild valuation support, use the Exactum button below.
For help with an insurance claim, underinsurance issue or average clause dispute, speak to Independent Loss Adjusters.
Call 0800 002 5178 or request free property claims advice from ILA.
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Ask For Free Property Claims Advice From ILA
Tell us what happened and where your claim stands. The initial conversation is free and without obligation. We’ll ask a few questions and explain whether ILA may be able to help. You can call us or complete the form; we’ll contact you using the details you provide.
If you choose ongoing support, we’ll explain the service and fee before work begins. Our general fee is 10% plus VAT of the overall settlement. Where you appoint ILA’s recommended contractors for the agreed reinstatement works, our fee is generally covered through that contractor route. The position depends on your claim and the proposed work.
What Happens After You Request a Callback?
When we speak, we’ll ask a few initial questions about the damage, your insurance policy and the current position of your claim.
You don’t need to have every document ready. The first conversation is simply to understand what has happened and whether we may be able to help.
If you’d prefer to speak to us directly, call 0800 002 5178.
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