When you get a buildings insurance quote, most providers will ask you for an estimated rebuild cost. But what exactly does that mean? And how do you work it out? Read on for more information on calculating a rebuild cost.
The rebuild cost is one of those things you quite often see cropping up in home insurance quotes, but what exactly does it mean?
A rebuild cost is a valuation on how much it would cost to completely rebuild your home from the foundations up, including labour and materials.
The rebuild cost is usually less than the market value or sale price as it doesn’t include the value of the land underneath – but that isn’t always the case.
What's the cost to rebuild my house?
The rebuild cost is the amount of money required to reconstruct your home from the foundations up. It can be broken down into two main factors:
- The cost of materials
- The associated cost of labour
How do I find out my property’s rebuild value?
With Admiral Home Insurance InstaQuote, we don't ask you for an estimate - this is worked out for you to make the quote process much quicker.
But if you're shopping around, knowing the cost to rebuild your property is important.
The following factors all help to calculate the rebuild figure:
- type of property
- location
- construction materials
If you own a standard home built with brick, you can either use a Rebuild Cost Calculator or hire a surveyor to give an accurate rebuild cost. If your home’s made from non-standard material, or has special architectural features such as a thatched roof, contact a surveyor.
Why is the rebuild estimate so important?
An inaccurate estimate could mean you pay more for your buildings insurance than necessary, while an accurate rebuild cost means your buildings insurance provider will be able to cover all of the costs should your home need to be rebuilt from the ground up.
You’ll avoid having to cover a shortfall in the estimate and the risk of invalidating your insurance if the rebuild costs exceeds your insurer’s criteria.
It’s important to remember that if the actual cost is higher than the figure you gave in the quote, your insurer won't be liable for the remaining difference, but you may be when you make a claim.
Why is the rebuild cost different from the market value of my home?
The key difference between the rebuild cost of your home and its market value is the rebuild amount is not influenced by geographical factors related to your property.
Factors such as market supply and demand, school catchment area etc don’t influence the cost of rebuild but will impact the market value of your home.
I live in a flat – how do I calculate my rebuild cost?
Flats and maisonettes are constructed differently to houses so if you live in either, it would be best to call out a surveyor for an accurate valuation, if needed.
If you live in a leasehold property, it’s worth checking the conditions of your lease before you pay for a surveyor.
Many flats and apartments in the UK are leasehold properties, meaning your landlord or the building owner will already have buildings insurance in place – the tenant/leaseholder often pays for this through the service charge.
I’ve renovated, should I update my rebuild cost?
If you’ve converted your property this’ll need to be factored into the rebuild cost and the RICS calculator estimate may not include this.
It’s also important your home insurer is notified of any updates to the rebuild cost of your property so you have the right level of buildings cover for your home.
When you quote for a home insurance policy with any provider – including Admiral Home Insurance – you'll usually be asked for the rebuild cost of your home if the cover you’re buying including buildings insurance.
Your home’s rebuild cost is usually less than your home’s market value – as it doesn’t include the value of the land underneath – but that isn’t always the case.
Knowing the cost to rebuild your property is very important when shopping for home insurance.
An inaccurate estimate may lead to you paying more for your buildings insurance than is necessary, and an accurate rebuild cost means your buildings insurance provider will be able to cover all of the costs should your home need to be rebuilt from the ground up and avoids the risk of you having to cover any shortfalls in the estimate.
