Do you know the rebuild cost of your home? - Home insurance - News - Moneyfacts

News

Do you know the rebuild cost of your home?

Do you know the rebuild cost of your home?

Category: Home insurance

Updated: 22/12/2015
First Published: 22/12/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Taking out home insurance can be a complicated process, but it's important to ensure that you get the right level of cover; otherwise you could be in for a nasty surprise if the worst was to happen. However, it appears that some homeowners could be putting themselves at risk of such an outcome, with many miscalculating the rebuild cost of their homes, leaving them underinsured as a result.

Knowing the rebuild cost

The rebuild cost of a property is the sum required to completely rebuild your property if it was damaged beyond repair. Confusingly, this is not necessarily the same as the value of your house, as this figure will also include labour costs and the price of materials. However, research by SunLife found that a staggering 67% of survey respondents didn't know the rebuild cost of their home, and more than a third (35%) mistakenly assumed it was the same as their house value.

Not having an accurate figure for the rebuild cost of a property could lead to problems if a claim needs to be made, and sadly, underestimating the rebuild cost could mean that the unlucky homeowner has to fork out the difference. This situation could be even more serious if the property is mortgaged, points out Simon Stanney of SunLife, as it could result in the loss of the home and a large debt to the mortgage lender.

So, how do you avoid such an outcome? Well, the best way to get an accurate rebuild figure is to hire a surveyor, who will carry out detailed measurements of your house. However, SunLife's research found that many people were reluctant to do this, with only 8% of respondents going down this route.

Hiring a surveyor is an added expense that many will wish to avoid, but it could be worth it to get the protection you need. An alternative is to scour the market for a policy that does not specify a rebuild cost at all, but you will need to make sure you check the policy carefully. You can start looking for the perfect home insurance by checking out our quote comparison tool.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Home insurance cost rises by 3.5%

New data from Consumer Intelligence has revealed that the annual cost of home insurance has raced ahead of inflation, having risen by 3.5% year-on-year to stand at an average annual premium of £123.

Get your home winter-ready

We hate to say it, but winter is well and truly setting in. So, if you haven't yet made sure that your home is ready for the colder months ahead, now's the time to get started.

Bargains for burglars on Black Friday

Many are looking forward to Black Friday next week, not to mention the following Cyber Monday (28 November), but did you know burglars are also looking forward to those days of deals? Don’t let them take you by surprise!
 
Close