CHECKING YOUR SUM INSURED

Rebuilding Costs

Most domestic house insurance policies require that the sum assured is the full rebuilding cost of the property. It is the responsibility of the insured to get this figure right.

Rebuilding costs used in the calculator, refer to the costs of demolishing and clearing away the existing structure and rebuilding it to its existing design in modern materials, using modern techniques, to a standard equal to the existing property and in accordance with current Building Regulations and other statutory requirements.

A house or a flat consists of the structure including all walls, roof, floors, partitions, doors and windows; any applied finishes and decorations; built-in fittings including fitted wardrobes and kitchens; the installations for heating, hot and cold water, gas, electricity, lighting (excluding light fittings), ventilation, sanitation and disposal, including all sanitary fittings (see About Buildings Insurance).

When carrying out an assessment, all items covered by the policy should be included. Policies usually extend to include outbuildings such as garages, greenhouses and garden sheds. Boundary walls, fences, gates, paths, drives and swimming pools may not be covered. For many domestic properties, the cost of external works, other than garages, may be small but in some circumstances they may have a significant effect on the total sum insured.

Reinstatement Cost Assessments

No two properties are exactly the same and consequently, the total rebuilding costs for every house or flat will be different. The calculator gives a general indication of rebuilding costs for many common properties within the UK, but it should be noted that it is not appropriate for all dwellings and the rebuilding cost of even similar houses can vary depending on individual circumstances.

The guidance figures are based on specific examples of different house and flat types of average quality, built using standard construction methods. They are not applicable to:

• houses or flats built of materials other than brick or stone
• houses with more than three or four storeys (depending on age) or with basements
• flats in a block which is more that four storeys high or where the block includes communal areas beyond stairs and corridors
• houses or flats with special design features
• houses or flats other than of average quality (although guidance is given on the possible range)
• houses or flats of greater size than those described
• houses containing hazardous materials eg asbestos, likely to require special precaution/treatment following damage or demolition; or
• houses which are considered to be historic or are listed buildings, which will almost certainly have to be rebuilt to their original design using identical materials.

Insuring Flats

It is recommended that a flat or maisonette is insured together with the other flats or maisonettes that make up the block, under a single policy arranged for the whole block. This will avoid complications which may arise if units are insured individually, and will also ensure that you have the widest possible cover available, eg for common parts, which may not be available under an individual policy.

If it is not possible to insure the block then you may be able to take out a policy on an individual flat and the calculator can help with a rebuilding cost. To calculate the rebuilding cost of a block of flats you should seek professional advice – do not rely on this calculator.

Historic and Listed Buildings

The rebuilding costs in the calculator provide for an average home to be rebuilt to its existing standard using modern materials and techniques. For historic and listed buildings, there is the added requirement to replace like for like.

Where it is necessary for your home to be rebuilt exactly in its original style to comply with local authority requirements, you must allow for the additional costs and a professional Rebuilding Cost Assessment is essential.

Finding a Surveyor

It is stressed that the calculator is intended for checking sums insured and is no substitute for professional advice and judgment, particularly where a property has any unusual features or is outside the range of properties described above.

If the rebuilding cost from the calculator is markedly different from your current sum insured, contact your insurance company, broker or a local chartered surveyor.

Professional advice can be obtained from a chartered surveyor – the RICS web site can be used to search for a chartered surveyor (http://www.ricsfirms.com/) in your area.