How do I work out the rebuild cost?
The rebuild cost is the amount that a property needs to be insured for, and this usually differs quite significantly from the market value of the property. The rebuild value needs to allow for rebuilding the property to the same specification, including clearing the land and any professional fees in the event of total destruction. The rebuild cost of the property will usually show on the insurance schedule as the ‘declared value’, and needs to be an accurate figure.
Insurance experts are unable to provide advice on the rebuild cost; therefore it’s the property owner’s responsibility to ensure the figure is correct, as well as making sure the building remains insured for the correct amount.
To work out the rebuild cost of the property, it’s recommended that a rebuild cost calculator is used. We recommend the Association of British Insurers online calculator. This allows you to use information, such as the construction type and size of the property, to work out what it should be insured for.
However, for some property types a survey is recommended to ensure the rebuild cost is accurate. For example, listed buildings, blocks of flats/maisonettes, or properties that are of a non-standard construction. The construction of these types of properties can vary too greatly for the rebuild calculator to give a precise figure, and therefore a surveyor will be able to provide more accurate advice.
It’s also worth bearing in mind that Endsleigh’s single property landlords policy calculates a notional rebuild cost “behind the scenes” for you, and provides up to £1,000,000 cover.