How to work out the rebuild cost of your home
When getting a buildings insurance quote, you’ll need to provide your home’s rebuild cost – the amount it would take to completely rebuild your home if it were destroyed, not its market value. Knowing this cost helps make sure you have the right insurance, so you’re not underinsured, overpaying, or left unprotected if something happens.
What is the rebuild cost of my home?
The rebuild cost of your home is the amount of money it would cost to completely rebuild the property if it suffered significant damage or was destroyed beyond reasonable repair.
This will include the cost of the labour, materials used and professional fees (such as architect fees). The rebuild cost is usually lower than the sale price of your home or market value as the land is already owned.
Why is it important to calculate it for my insurance?
You’ll need to know the rebuild cost of your home when it comes to buying buildings insurance. This is because you need to have an accurate figure to help prevent you from under or over insuring your house.
Should anything unfortunate happy to your home, if you are not adequately insured you could end up being left to cover the difference in costs.
What factors affect rebuild cost?
The following factors can affect your rebuild cost:
- The rebuild cost will be higher if your home is made from non-standard materials (like anything other than brick).
- Special architectural features (such as custom woodwork) can also increase the rebuild cost.
- Any improvements or extensions will add to the rebuild cost and should be considered when updating your insurance cover.
Be sure to regularly review your policy and notify your insurer of any changes to your property to ensure your cover is accurate and up to date. If you’ve had the same figure for a rebuild cost for several years and have had an extension, you’ll likely need to update the amount.
Calculating rebuild costs
The rebuild cost can be broken down by many factors but the two main factors that will take up a large sum of the cost will be – the cost of materials and the cost of labour to build a house that is identical to yours.
The best way for you to get an accurate costing would be to book an appointment with a surveyor. They will carry out detailed measurements of the house and prepare it for a professional Rebuilding Cost Assessment.
If you have recently purchased a new property or re-mortgaged your property, the survey conducted will usually state the rebuild cost.
Another option for you is to use a rebuild cost calculator, which you can find online. Before you use one of these you need to know the external floor area of both upstairs and downstairs of your property - if applicable.
This will give you the rebuilding cost per square metre. If the upstairs space is the same as downstairs, double the ground floor area. If it is different, calculate the upstairs area and add it to the downstairs result. Then, measure the length and width of your home's outside walls on the ground floor. This is needed to calculate your rebuild costs as you’ll need to know your home’s gross external floor area.
What happens if I get the rebuild value wrong?
It’s important to get your home’s rebuild value correct. If you underestimate, your insurance might not cover the full cost, and then you’d have to pay the rest yourself. If you overestimate, you’ll end up paying higher premiums than you need to. By estimating accurately, you’ll make sure that your insurance covers everything without costing you extra.