Ensuring the “building sum insured” accurately reflects rebuild costs is a pivotal aspect of household insurance, an issue that gains complexity when applied to listed buildings. Recent data highlight the significance of this matter.
The Department of Business & Trade’s most recent monthly analysis on building materials might initially indicate a positive trend with a 2.3 per cent decline in the “all works” category prices from the previous year¹. Yet, further insights reveal challenges, particularly for those restoring listed buildings, with increases in the cost of crucial materials like cement and reductions in production, availability, and delivery metrics compared to 2023, factors that are critical in calculating an accurate building sum insured.
The greatest risks to rebuild underinsurance, leading to inadequate claim settlements, stem from reliance on imprecise estimates and a mindset of invulnerability, encapsulated in the phrase “It will never happen to me”.
For those residing in listed buildings, the idea of a total rebuild is often far from thought, given the properties’ historic and architectural value. Nonetheless, when extensive, authorised renovations are in progress, it becomes crucial for homeowners to ensure their insurance policy adequately covers the requisite specialised materials and methodologies, a necessity underscored by the report’s findings.
In cases where complete reconstruction becomes necessary due to severe damage, securing sufficient insurance coverage beforehand is imperative.
The unique nature of listed properties necessitates careful attention to the materials employed and the craftsmen involved, stressing the importance of precise calculation of the “building sum insured” to encompass potential increases in material costs and address supply chain complications.
With its extensive experience in the domain of listed properties, Abode Insurance provides more than mere insurance coverage; it offers advice on ensuring readiness and comprehensive protection against all eventualities, including fluctuations in the building materials market.
Distinguishing between the market value of a property and the appropriate insured amount is vital. Steve Hook, Divisional Director at Abode, highlights the criticality of this distinction: “This has to be the single biggest issue for household insurance today. The cost you paid for your home (this year or ten years ago) isn’t the same as the sum you insure it for. Guess at the cost to put it back together and I’ve absolutely no doubt you’ll get it badly wrong.
The task of insuring listed properties is further complicated by the elevated costs of specialised materials and expert labour.
Hook’s advice is to consult with a specialist broker to safeguard your home insurance and the protection it affords your listed property.
For any enquiries or concerns about your current insurance, especially regarding the buildings sum insured, you can contact the specialist team at Abode at info@abode-insurance.com or on 01622 476433.
¹ Monthly Statistics of Building Materials and Components September 2023 (publishing.service.gov.uk)