Rebuilding Costs – Why Does the Recommended Sum Insured Have to Be So High?

Rebuilding Costs – Why Does the Recommended Sum Insured Have to Be So High? – Many of the questions we’re often asked about high value home insurance focus on the vexed business of rebuilding costs after a fire, flood or other accidental damage such as that caused by a storm.
Some of the questions are quite technical. Others are more straightforward.
All high value buildings insurance policies cover not just the main house and the drives, paths, patios, gardens, boundary walls and fencing, but also all the outbuildings and other features such as swimming pools and tennis courts. In many cases, the extra cost of rebuilding these additional features can be very high. For example, there have been cases where the cost of rebuilding boundary walls actually exceeded the cost of rebuilding the main house.
Generally speaking, rebuilding costs tend to be far more expensive for older properties, particularly those that are listed buildings. At the same time, all high value insurance policies have to allow for rebuilding to the same specification as existed prior to the claim, with all the work being carried out in accordance with current building regulations.
As you’ll appreciate, this can prove expensive. As an example, a house built of stone may cost as much as 50% or more to rebuild than a house built of brick. Moreover, with many older properties having been built on inadequate foundations compared to today’s standards, high value policies have to allow for the cost of new, regulation-compliant foundations.
High value insurance policies also provide cover for the cost of demolitions, debris removal and architects and surveyors fees, all of which must be factored into the rebuilding costs, thus raising the sum insured to higher-than-standard levels.