BUILDING INSURANCE CALCULATIONS
Using the latest BCIS (Building Cost Information Service) figures we are able to calculate an accurate, regionalised insurance valuation.
The sum insured should be the rebuild cost of your property, not how much it is worth. If you over-insure yourself, the insurers will not pay out more than the building costs to rebuild, so you will have paid a higher premium for nothing.
The cost of under-insuring yourself is much more sinister. Let us say that the rebuild cost of your property is £100,000, but you insure it for 20% less than this at £80,000. If your house burns down your insurer will only put £80,000 towards the rebuilding costs.
Even worse, if you have a smaller claim you will still lose out. If you suffer £10,000-worth of storm damage, the insurer will say that you are under-insured by 20%, so it will deduct 20% from your claim. So it will only pay £8,000 (less your policy excess).
It is the insured responsibility to get this figure right and keep it up to date.
Rebuilding Cost Index is widely used for index linking the sum insured between annual revisions of the policy. However the BCIS recommends that the rebuilding cost is checked regularly (at least every five years), rather than relying on index linking. BCIS calculates the House Rebuilding Cost Index for the Association of British Insurers (ABI).