There has been a lot to think about and prepare for the COVID-19 pandemic, and when you move home it can be easy to overlook the finer details. However, there are a few things that you absolutely need to get right the first time around.
If you’ve ever insured a property, you know that getting home insurance is based not only on the “fair market value” of your property – the amount it is being sold for today – but also on the “rebuilding costs”.
This refers to the amount of money it would cost to rebuild or restore your property from scratch if it were completely destroyed by an insured hazard.
Your insurer only pays out the amount for which you insured the building. So if you misjudge the sums insured and your property requires extensive renovation work, you will not receive a sufficiently high payout. Smaller claims are also reduced by the percentage of which your building is considered underinsured.
Whether you are a homeowner or a landlord with commercial and / or residential real estate, getting the calculations right is important. Here are some top tips to get your recovery value totals correct:
Look at all the variables
It’s not just the size of your building that determines the cost of rebuilding. While this will affect the amount of materials used, you also need to consider which ones they are. Is it made of specific or unusual materials? Also take into account the style, quality and location of the building. Do not forget to indicate the cost of labor, which depends on the size of the project and the duration of the new construction.
Changes in UK building codes and stricter environmental laws can well mean that your buildings are going to cost more to rebuild today than they were when you first insured them. Other geographic factors also make a difference – for example, the costs of reconstruction are different in the north than in the south.
Listed buildings, listed buildings and those that are otherwise “outside the norm” would require the attention of specialized construction workers and must therefore be assessed on site by experienced experts.
Let experts advise you
Regardless of the type of building you own or what it is used for, a professional surveyor’s assessment is the most accurate way to arrive at an insured amount. This gives you the peace of mind that your insurance company would cover all of the restoration costs if it were ever necessary. You should also periodically reassess your buildings.
Your broker can put you in touch with a Chartered Surveyor and provide further advice on arranging accurate home insurance. Contact our experienced team to find out more, either by email or by phone on 01442 286910.
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