Brmingham Library

Is Your Building Underinsured?

9 out of 10 Buildings in the UK have the incorrect sum insured. The sum insured is the cost of rebuilding from scratch which also includes any professional fees – it is not the same as the building’s market value, which in some cases might be higher or lower.

You must always use a chartered surveyor to properly calculate the sum insured, this is because many people do not know a lot about building materials and the building requirements involved.

So, with that in mind, when did you last assess your buildings sum insured?

These are some key sum insured questions you should be asking yourself

Are you confident your buildings sum insured is adequate or is it too high?

You should assess how the original sum insured was calculated:

  • What the previous owner insured the building for?
  • What is the total market value of the property?
  • What has the bank or building society suggested?
  • Did you have advice from a building contractor? 
  • Have you previously guessed the sum insured value? 
  • Was there any advice from an RICS surveyor?

Surprisingly, only 5% of of people take any advice from an RICS surveyor when it comes to organising their buildings sum insurance.

Many buildings remain underinsured

By underinsuring, this can severely reduce the amount received following a claim as Insurers can proportionately reduce the claim settlement, by the percentage the buildings are underinsured. 

Equally, by being over insured will not mean Insurers will allow you to build beyond what is reasonable to reinstate the original property. 

Whilst no one likes to pay too much for insurance, in the event of a claim, to have peace of mind that you will have an adequate amount to repair or reinstate your property, is one of the key pillars for any property owner when arranging their insurances. 

What can you do to make sure you aren’t underinsured?

If you would like to know how you could reassess your buildings sum insured, utilising professional advice at a reasonable cost please contact JPM Insurance Advisers Ltd. We have access to a range of RICS regulated professional advisers, charges start from £160 per Desktop RCS Survey Report with discounts available. 

Please contact JPM Insurance Advisers Ltd on 0121 270 4800 to discuss your insurance requirements.

Jon Till headshot

Written by Jonathan Till

jmtill@jpm-group.co.uk