Home buildings insurance: working out rebuild costs
Home buildings insurance offers protection for the fixed 'bricks and mortar' elements of your home, including damage to the roof, ceilings, walls and floors, and rebuilding costs if your home is destroyed. The price of cover therefore varies from one property to another, according to how much it would cost to completely rebuild the home from scratch if it was ever destroyed.
The rebuild value is not the same as the property's market value if you were selling it, however – since the rebuild value only includes the cost of materials and labour, rather than taking into account other factors that would usually influence a property's market value, such as the desirability of its location.
The Association of British Insurers (ABI) has commissioned the Building Cost Information Service (BCIS) to provide general guidance to help you check the adequacy of the sum that your home is insured for. It provides a whole host of guidance on the costs of rebuilding houses and flats, as well as a residential rebuilding cost calculator to offer a rough idea of your home's rebuild costs so you don't end up paying any shortfall yourself. It's simple and free to use, you just need to register on the site first. You only need to insure your home for its rebuild cost, so this calculator will help ensure you're not over-insuring or under-insuring.
The BCIS takes into consideration factors such as the property size and the materials used in its construction, so you need this information to hand when you use the calculator. Property types that may not be covered by the BCIS calculator include houses built of stone or materials other than brick; properties with more than two storeys; and historic listed buildings, amongst others. You may need to seek out a professional quote for a rebuild value for such buildings.
Buildings insurance for flats
Due to the shared responsibility for communal areas in many flats, insurers often advise owners to get together and insure the whole building together under a single policy, rather than each taking out a separate policy each, in order to make sure that all parts of the building are adequately covered. Consider talking to the owners of the other flats in your building to see if you can club together and find a single building insurance policy.