Underinsurance – Its important you are insuring the correct sums insured…

Your home is one of the most valuable assets you are likely to own

With raw material prices increasing and inflation on the rise, it’s important to acknowledge the very real cost of under insurance. Rebuild costs have increased over the last 18-24 months – brought about by a combination of Covid-19 and Brexit – rebuild costs have inevitably gone up.


Why are the sums insured so important?


The sums insureds are one of the main factors in how the premium is calculated. It is now more important than ever that you are not underinsured at the time off a loss.

What to do if you are unsure about your sums insured…


Buildings – The most accurate way to calculate this figure is to have a rebuild cost assessment carried out by a qualified RICS (Royal Institute of Chartered Surveyors)/SCSI (Society of Chartered Surveyors) surveyor. We do not recommend the use of online calculators as they can provide a generalised figure that may not be appropriate for your specific property, particularly if it has any unusual features.

Contents – You may find it helpful to create an inventory of your contents, including contents in the garden and outbuildings which should be reviewed on a regular basis, particularly after purchasing new items. For jewellery or fine art, guidance from a specialist valuer should be sought (it may be a requirement of the policy that valuations are conducted on a regular basis – normally every 3 years as a minimum).

Buildings – Reminders/Pointers

  • Building sum insured – Needs to be the full value cost of rebuilding the property by a professional third-party contractor. This includes rebuilding expenses such as architects & surveyor fees, clearing the site of debris, complying with local building regulations etc.
  • Outbuildings, Walls, Fences, Driveways, Paths etc. also need to be included in the building sum insured.
  • The policy wording will contain a definition for buildings which explains the things which need to be considered by you.
  • Does the sum insured seem adequate for the size of property? Consider the number of bedrooms for example.
  • NOTE: The rebuild cost of the home is not the same as the market value.

Contents – Reminders/Pointers

  • As a general rule of thumb if you were to turn the property upside down anything that isn’t fixed would be classed as contents.
  • For general contents and personal possessions, the figure must be the cost to replace as new.
  • For valuables the figure must reflect the current market value.
  • The policy wording will contain a definition for contents which explains the type of items which need to be considered.
  • Does the general contents sum seem in proportion with valuables?


We’re here to help – If you need help, clarification or have any questions regarding the advice in this email, please contact us on 01256 463090