Home Insurance – Rebuilding Costs – FAQs

Home Insurance – Rebuilding Costs – FAQs – I have contacts that suggest I could rebuild my home for a lower figure than you suggest. Why can’t I insure at that level?
The rebuilding costs used for insurance purposes have to allow for the cost of demolitions and debris removal. If you built or have re-built your home, you may not have included this within your calculations.
Equally, if your home is listed, it can often be very expensive and time-consuming to record, photograph and even label the fabric of the building to ensure the correct reconstruction.
Similarly, special offers and discounts that were available when you first built, renovated, decorated or refurbished your home are not usually available the second time around. Indeed, when an insurance company is settling a claim, all the evidence shows that suppliers are far less likely to ‘strike a deal’ or charge discounted rates. Moreover, your contacts and connections may have changed or gone out of business, leaving you unable to secure the same prices for goods or services following a loss.
Even if you are in the building trade and have bought items in bulk, using the majority for other projects and retaining some for your own home, it’s clear from the evidence associated with losses that, where one has to refurbish or rebuild in isolation, unit costs can increase significantly.
Lastly, if you have personally project-managed the construction or major refurbishment of your home, you will have saved a lot of money by giving up your time free of charge and not employing others to do this on your behalf. You may not be in a position to – or even want to – take on this responsibility following a loss. Most people, faced with having to rebuild their home, usually opt for having the rebuilding professionally project-managed. This results in additional contractors’ overheads and profit, as well as professional fees.
In summary, we have to recommend that our clients insure for values that are suitable for their homes and subject to normal tender processes, because there is no guarantee that deals and discounts that were previously available will still be available in the event of a major claim.
How do you arrive at a reinstatement assessment?
Costing data is obtained from a variety of sources but suggested rates are not used without referring to other evidence found on site. Building rates applied take into consideration a range of factors starting with the type, size and quality of materials found at your home. Allowance is made for special features found in each property, for vernacular materials where relevant, and for architectural details.
Outbuildings and hard landscaping are also included in the assessment. If particular features, such as a conservatory or tennis court, have been added, these costs will be factored in.
Other points, including the specific location of the building, will also be factored into the cost analysis. If, for example, your home is in a rural location and some distance from key suppliers, or if access is restricted in some other way, there will be an increase in materials delivery costs, which will have to be taken into consideration.