Inside Insurance – Is Your Home Under Insured?

Too often, homeowners request insurance cover based on outdated rebuild valuations, the market value of their house or, in some instances, guesswork. What should be considered is what it would cost to rebuild the property, which includes site clearance and professional fees which may end up being greater than the current market value.

 Whether it is your own home, or a holiday home you should make sure the sum insured is based on today’s build prices.  An example of claim that went badly wrong was a property owner who rented out holiday cottages.  Their sum insured for each holiday cottage was based upon rebuild valuations obtained five years ago. A fire spread from a neighbouring property and caused catastrophic damage to one of the property owner’s holiday cottages. The extent of the damage was such that the property was a total loss, requiring demolition and a complete rebuild.

The policy rebuild valuation of £400,000 was five years old. A value-at-risk assessment calculated the true rebuild value to be £750,000 due to the rise in material and labour costs, leaving the property owner underinsured by 47%. Unable to meet this £350,000 cost, a cash settlement was agreed and the insured lost this property as a source of income.

A recent report by Buildings Insurance Valuation Services found that for 75% of the instructions it received last year, the property in question was underinsured.

Until recently, a professional building insurance valuation would have cost a significant amount of money and time. However, Henley insurance broker and Herald sponsor, ManningUK now has an arrangement with a company regulated by Royal Institute of Chartered Surveyors’ who have developed a new and innovative approach which makes assessments far more affordable and quicker. To discuss or request a rebuilding valuation contact ManningUK on 01491 578759 and speak to Paul Sweeney for commercial valuations or Harry McEwen for residential valuations.​