You'll have probably noticed when getting home insurance quotes you're asked about the rebuild cost – we explain why
When you quote for a home insurance policy with any provider – including Admiral Home Insurance – you'll usually be asked for the rebuild cost of your home if the cover you’re buying including buildings insurance.
Your home’s rebuild cost is usually less than your home’s market value – as it doesn’t include the value of the land underneath – but that isn’t always the case.
Knowing the cost to rebuild your property is very important when shopping for home insurance.
An inaccurate estimate may lead to you paying more for your buildings insurance than is necessary, and an accurate rebuild cost means your buildings insurance provider will be able to cover all of the costs should your home need to be rebuilt from the ground up and avoids the risk of you having to cover any shortfalls in the estimate.
What is the cost to rebuild my house?
The rebuild cost is the amount of money required to reconstruct your home from the foundations up should the worst happen.
It can be broken down into two main factors:
1. The cost of materials
2. The associated cost of labour
How do I find out my property’s rebuild value?
The type of property, the location of your property and the construction materials of your home all help to calculate the rebuild figure. It’s important you’re able to provide as accurate a figure as possible. This ensures you’re not over or under-paying for your home insurance.
When you get a home insurance quote with Admiral, the rebuild cost is already calculated in most circumstances. Through a partnership with the Royal Institution of Chartered Surveyors (RICS), Admiral is able to provide an estimate of the rebuild cost of your property using some of your information.
It’s important to remember that if the actual cost is higher than the figure provided during the quote, your insurer will not be liable for the remaining difference and you may be liable in the event that you need to claim.
You can also use the rebuild calculator provided by the Building Cost Information Service, commissioned by the Association of British Insurers.
Why is the rebuild cost different from the market value of my home?
The key difference between the rebuild cost of your home and its market value is the rebuild amount is not influenced by geographical factors related to your property.
Factors such as market supply and demand, school catchment area etc don’t influence the cost of rebuild but will impact the market value of your home.
I live in a flat – how do I calculate my rebuild cost?
Flats and maisonettes are constructed differently to houses so if you live in either, it would be best to call out a surveyor for an accurate valuation.
It’s worth noting that these properties are often occupied on lease so it’s likely your building owner will already have buildings insurance in place, which is typically included in the service charges of your lease.
My property has recently undergone a renovation, should I update my rebuild cost?
If you’ve recently converted your property this will also need to be factored into the rebuild cost, and this is something the RICS estimate may not include.
It’s important your home insurer is notified of any updates to the rebuild cost of your property so you have the right level of buildings cover for your home.
You can find more information on rebuild costs on the RICS website.