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Getting Your Building Sum Insured Right

Getting your rebuild sum insured right is one of the most important – and most misunderstood – parts of arranging property insurance. A rebuild cost is not the same as a sale value. The sale price reflects what a buyer will pay for your property on the open market. The rebuild cost reflects what it would take to demolish what remains and reconstruct the property like-for-like after a major loss – including materials, labour, debris removal, professional fees, compliance with current building regulations, and allowances for access or specialist work.

Independent research from RebuildCostASSESSMENT indicates that as many as 9 in 10 properties are insured for the wrong amount. If your sum insured is too low, the condition of average (a common policy clause) can reduce a claim proportionally, and in some cases, insurers may decline parts of a claim. In short, underinsurance can turn a difficult incident into a financial shock.

Why Rebuild Costs Matter

Market value moves with demand, location, and interest rates. Rebuild costs move with construction inflation, local labour rates, supply-chain pressures, and the complexity of your particular building. A modest home in an expensive area might have a lower rebuild cost than its market value, while a listed or bespoke property might cost far more to rebuild than you expect, even if its sale value appears modest.

What Typically Affects This

Several factors drive the true cost of reinstatement. These include demolition and site clearance, professional fees (architects, engineers, surveyors, planning), compliance with modern building regulations, specialist materials or craftsmanship (for listed, heritage, or high-spec homes), access challenges, outbuildings and external works, plus fixtures, finishes, and services. Construction inflation and supply issues can change quickly, so a figure that felt right two years ago may already be out of date.

How Underinsurance Reduces Claims

Most property policies apply the average clause. If you insure a building for £500,000 but the true rebuild cost is £1,000,000, you are 50 per cent underinsured. In that scenario, a £100,000 claim may only be paid at £50,000, because the insurer treats you as your own insurer for the missing half. It is not a technicality – it is a fundamental condition of many policies.

When To Get An Assessment

You should consider a fresh assessment if you have extended or renovated, installed high-spec kitchens or bathrooms, changed roof coverings or glazing, added outbuildings or hard landscaping, or if it has been more than three years since your last review. For listed or complex properties, more frequent checks are sensible due to volatility in specialist labour and materials.

How Java Insurance Helps

Java Insurance makes this simple and practical. We start by confirming how your property is constructed and what is included in your policy definition of “building” – for example, outbuildings, walls, drives, and specialist installations. We then help you set an appropriate rebuild sum insured, using reputable assessment services where needed and explaining the results in plain English. For clients with mid to high-value homes or unique features, we can arrange specialist reviews to capture heritage materials, bespoke finishes, or complex building methods.

Once we have a robust rebuild figure, we place your cover through the Movo Partnership panel to source competitive terms with the right wording. We also schedule periodic reviews, so inflation, improvements, and regulation changes do not leave you exposed. If you ever need to claim, we stand with you – guiding documentation, liaising with insurers, and helping the process move quickly and fairly.

Our Services

Java Insurance provides tailored business insurance for all kinds of sectors, including construction & trade, property owners & landlords, farming, fleets, hospitality, manufacturers & wholesalers, motor trade, offices & professional services, and retail.

We also offer personal insurance services, which covers life insurance, mid & high net worth home insurance, and property owners & landlord insurance.

Contact Java Insurance

Rebuild cost, not sale price, drives how your building insurance responds at claim time. The right figure protects you from proportional reductions and supports a smoother settlement. With Java Insurance, you get clear advice, access to trusted assessment providers, and cover that reflects the true cost of reinstatement.

Speak to Andy for a straightforward chat and clear options. Call 01435 583584 or send us a message to arrange a no-obligation review.

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