Calculating rebuild costs
Find your rebuild value (not resale) for buildings insurance
When you get a home buildings insurance quote, you'll be asked for your home's rebuild value, which is how much it would cost to repair your home if it were completely destroyed, not how much it's worth. It will often provide an estimate for you, but it's always worth checking this (and regularly throughout the policy) to ensure you have the right amount of cover – this short guide shows you how.
What is the rebuild cost of my home?
If you own your home and you're responsible for its maintenance (as is often the case if it's a freehold property), you'll also be responsible for arranging buildings insurance – and if it's mortgaged, this is usually mandatory. If you rent, or your property is leasehold, it's up to your landlord or freeholder to sort.
Buildings insurance covers the structure and permanent fixtures of your home, and should cover the entire cost of rebuilding your home if it were fully destroyed, such as following a fire or serious subsidence.
This is referred to as your rebuild cost, and you'll be asked to enter a figure for this when getting a home insurance quote as it will determine the total sum insured – the maximum amount the policy would pay out.
Importantly, this is not how much you'd expect your home to sell for. The resale value of your home is typically higher than its rebuild cost, so you could be paying for cover you don't need.
What factors affect the rebuild cost?
The key is the cost of labour, materials and architects for your area. However, a buildings policy should also factor in the costs of providing somewhere for you to stay while your home is rebuilt.
The actual rebuild cost would therefore be higher for a large, listed home with a thatched roof than it would be for a small home of standard construction.
Either way, it's worth reviewing your policy regularly to ensure you have the correct amount of cover – particularly as labour and material costs have sharply risen recently.
What happens if I get the rebuild value wrong?
There are two possible outcomes here:
- Underestimate your rebuild value and you'd have to cover some costs yourself. Imagine the worst were to happen and a fire destroyed your home. Not only would you have the emotional trauma to deal with, but the prospect of having to live in temporary accommodation.
Your home insurer would help you with the claim, and you could appoint a loss assessor, and your home would start to be rebuilt. However, at some point you're contacted to be told your home will cost more to rebuild than your policy will pay for, leaving you with a bill for some of the work.
- Overestimate and you'll be paying more for your insurance than you need to. This is the safer option, but overestimate too much and you'll be over insured, meaning your insurance premiums will be based on a higher amount than you'll ever need.
How do I calculate my rebuild cost?
To find a rebuild value, paying for a home survey is the most comprehensive and reliable way, though it's an expensive option costing up to £1,500 (unless you're already getting one as part of a property purchase).
A quicker, but less accurate option is the free Association of British Insurers calculator.
You'll need to register to use it, but it should only take a few minutes or so to complete. To speed this up, make sure you have the following information to hand:
- Property type, so if it's detached, semi-detached or terraced.
- Year it was built and type of construction, such as brick or stone walls.
- Number of floors and rooms, so number of bedrooms, bathrooms etc.
- Your postcode.
- Size of the floor area. If your property has recently been listed for sale or sold, using Rightmove or Zoopla's sold prices can be a good way to locate the floorplan that the estate agents usually put together, which should have this figure on it.
You're able to use the calculator four times in any 12-month period.
More home insurance tips
We've a whole host of home insurance top tips and tricks to get cheap cover. Below is a quick round-up of where we'd suggest you head to next...
Suggestions for you
- Read our full Cheap home insurance guide, including our step-by-step cost-cutting system.
- If you rent, see our Cheap contents insurance for tenants guide.
- See our full Home insurance section with all our guides.
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