The critical role of accurate rebuild values for landlords

 If your rented property is damaged beyond repair in a fire or flood, then it’s important to look at rebuild values.

You’ll be asked for your property’s rebuild cost when taking out buildings insurance which covers the structure of your home.

Finding the correct rebuild value for your insurance can be tricky, and here at Property118, we have teamed up with The Home Insurer which helps provide a top-class service and could help save you money.

Rebuild cost is usually lower than your home’s sale price

According to the Association of British Insurers (ABI), the rebuild cost is the amount it would cost to completely rebuild your property if it was destroyed beyond repair which includes the price of labour and materials.

It’s important to remember that the rebuild cost is usually lower than the property’s sale price or market value.

The best way to calculate your rebuild value cost is by paying for a chartered surveyor assessment of the property. While it can be expensive, it’s the best way to find an accurate and reliable estimate.

To get a rough estimate, the ABI provides a free rebuild calculator. You will need to register to use it, but it should only take a few minutes to complete.

Calculating your rebuild cost can be a daunting prospect

To speed this up, make sure you have the following information to hand:

• Property type, so if it’s detached, semi-detached or terraced.
• Year it was built and the type of construction, such as brick or stone walls.
• Number of floors and rooms, so number of bedrooms, bathrooms etc.
• Your postcode.
• Size of the floor area. If your property has recently been listed for sale or sold, using Rightmove or Zoopla’s sold prices can be a good way to locate the floorplan that the estate agents usually put together, which should have this figure on it.

You’re able to use the calculator four times in 12 months.

Kate Hughes, a money and savings expert at moneysupermarket.com, said: “Calculating your rebuild cost can be a daunting prospect but it’s worth doing – and properly.

“Take your time, go through the task step by step, and call in the experts, such as a surveyor, if you need to – especially if it is an unusual or complicated job.”

She warns: “A misstep could result in higher premiums than necessary if you overestimate, or a shortfall if you underestimate and then need to make a claim.”

Landlords need to make sure they have accurate rebuild values

Jason McClean, the director of The Home Insurer, says landlords must have accurate rebuild values.

He told Property118: “Rebuild values are contentious at the moment with big raises of 10%+ from inflation driving insurance prices up.

“The importance of correct rebuild values can’t be understated. If underinsured, then you can have a claim refused as seen as fraudulent.

“Landlords need to make sure they have accurate rebuild values for their properties otherwise they may be paying for insurance that will not perform when needed.”

According to Money Saving Expert, if you get your rebuild values wrong there are two possible outcomes:

• Underestimate your rebuild value and you’d have to cover some costs yourself. Imagine the worst were to happen and a fire destroyed your home. Not only would you have the emotional trauma to deal with, but the prospect of having to live in temporary accommodation.

Your home insurer would help you with the claim, and you could appoint a loss assessor, and your home would start to be rebuilt. However, at some point you might be contacted and told your home will cost more to rebuild than your policy will pay for, leaving you with a bill for some of the work.

• Overestimate and you’ll be paying more for your insurance than you need to. This is the safer option, but overestimate too much and you’ll be overinsured, meaning your insurance premiums will be based on a higher amount than you’ll ever need.

Factors that affect the rebuild value

A variety of factors affect the rebuild cost of a home. According to moneysupermarket.com if your home is made of non-standard materials, such as thatch or even timber and concrete, it could be more expensive to rebuild than a typical brick home.

This is because the material costs more, or it might require a specialist builder who charges a premium.

The type of property is also important. If you live in a block of flats, the rebuild may affect the entire building rather than just your home, making it more difficult to estimate how much cover is required.

The Home Insurer is here to help landlords

Determining the accurate rebuild cost of your property is crucial for ensuring you have adequate insurance coverage in the event of a disaster.

It offers peace of mind knowing you are protected against whatever life may throw at you.

While it may seem a daunting task, The Home Insurer is on hand to help landlords with any insurance queries related to rebuilding values.

The most efficient way to get a personal quote with the best price and cover possible is to call the team on 01832 770965 so we can focus on your enquiry when you are ready and sitting down with your portfolio details to hand.

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