Ensuring the accuracy of rebuild costs and insured value, referred to as the “building sum insured”, is crucial in household insurance, particularly when it comes to insuring listed properties. This concern is heightened by recent data and analysis.
Despite the Department of Business & Trade’s latest monthly building materials report highlighting a 2.3 per cent reduction in prices for the “all works” category compared to last year¹, subsequent details paint a less optimistic picture for listed building restoration projects. The rising cost of essential materials like cement, coupled with decreased production, availability, and delivery rates compared to 2023, could significantly influence the determination of an accurate building sum insured.
The pitfalls of rebuild underinsurance, often due to guesswork and rough estimates, can lead to inadequate claims settlements in the event of damage, second only to the complacency of thinking “It will never happen to me”.
Owners of listed properties rarely anticipate rebuilding from the ground up, drawn instead to their homes’ historical allure and unique features. However, when extensive renovations are approved, the onus is on the homeowner to ensure that the policy fully covers specific materials and construction techniques, as highlighted in the report.
In scenarios where total reconstruction is necessary due to irreparable damage, ensuring adequate insurance coverage beforehand is paramount.
The uniqueness of a listed property demands meticulous attention to the materials used and the craftsmen employed for restoration, emphasizing the importance of accurately determining the “building sum insured”. This includes accommodating material price fluctuations and potential supply chain disruptions.
Abode Insurance, with over two decades of expertise in listed properties, offers more than just insurance coverage. They provide guidance on preparing and securing comprehensive coverage for any situation, including market changes in building materials.
It’s crucial for clients to understand the distinction between the market value of their property and the appropriate insured amount. Steve Hook, Divisional Director at Abode, stresses the importance of this understanding: “This has to be the single biggest issue for household insurance today. The cost you paid for your home (this year or ten years ago) isn’t the same as the sum you insure it for. Guess at the cost to put it back together and I’ve absolutely no doubt you’ll get it badly wrong.
The complexity of insuring listed properties is exacerbated by the higher costs associated with specialised materials and labour.
Hook advises consulting with a specialist broker to avoid risking your home insurance and the protection it provides for your listed property.
For any concerns or inquiries about your current insurance, particularly regarding the building sum insured, reach out to Abode’s expert team at [email protected] or call 01622 476433.
¹ Monthly Statistics of Building Materials and Components September 2023 (publishing.service.gov.uk)
