When taking out buildings insurance you will be asked for your home's rebuild cost, and this amount will decide how much you need to insure the property for.
There are two main ways to find your home's rebuild cost: hire a surveyor or use a rebuild calculator.
Hire a surveyor
The best way to get an accurate rebuild cost is to instruct a chartered surveyor to carry out detailed measurements of your house and then prepare a professional Rebuilding Cost Assessment.
Use a rebuild calculator
A second option is to use a rebuild calculator. Though simple and free to use, the drawback is that you only get a rough idea of your home's rebuild cost. This is important to bear in mind because if you under-insured and then, for whatever reason, your home requires a rebuild, you would only be paid up to the amount your home insurance covers, leaving you to cover any shortfall.
Likewise, don't make the mistake of over-insuring, i.e. don't insure for the amount you paid for your home or its current market value, both of which are likely to be much higher than the rebuild value. You only need to insure your home for its rebuild value.
To use the calculator you will need your home's external floor area for both upstairs and downstairs. To find the ground floor area: go outside, measure the length and width of the downstairs walls and multiply these two figures together. If the upstairs is identical to the downstairs, simply double the ground floor area. If different, calculate the upstairs area separately and add it to the downstairs result.
Once you enter the above information, plus answers to a few other questions, simply hit 'calculate' and you'll be presented with the approximate rebuild cost of your home.The calculator is not suitable for finding the rebuild cost of flats because construction methods vary too greatly. A surveyor may be your best bet in this instance. However, as most flats are leasehold there should already be buildings insurance in place through the management company or building owner, and paid for via service charges. If you have a lease, check the contract just to make sure.
Important: The calculator is based on five house types (detached, semi, terraced, detached bungalow, semi bungalow) of average quality and standard construction. You should consider hiring a surveyor to find the rebuild cost for:
- Houses not built of brick
- Properties with basements, cellars or more than two storeys
- Houses with special design features
- Houses other than of average quality
- Houses of greater size than those described in the tables in the Association of British Insurers Buildings Insurance for Homeowners leaflet
- Houses containing hazardous materials within their construction, such as asbestos
- Historic or listed buildings
Regularly check your home's rebuild cost
It is important to periodically check that your buildings insurance amount still covers the rebuild cost. Some insurance providers automatically do this by 'index linking' the policy, i.e. premiums will adjust in line with fluctuations in rebuild costs. Also, any extensions to the property will likely increase the rebuild cost. The point is, if the rebuild cost increases without your buildings insurance increasing to match, you could end up under-insured again, a big problem should the property require a rebuild and you have to make up the shortfall.
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