Accurately assessing rebuild costs and ensuring these are reflected in the “building sum insured” is a cornerstone of household insurance, a concern that is magnified when insuring a listed building. Current data and analyses bring to light the ongoing ramifications of this issue.
The Department of Business & Trade’s latest monthly report on building materials initially presents an encouraging picture with a 2.3 per cent decrease in prices within the “all works” category compared to the previous year¹. However, a closer examination reveals less promising trends, particularly for the restoration of listed buildings, with the price of essential materials like cement on the rise and a decrease in production, availability, and delivery compared to 2023, impacting the accurate determination of the building sum insured.
One of the primary risks leading to underinsurance and subsequently insufficient claims payouts is the reliance on guesswork and estimations, closely followed by the complacent belief that “It will never happen to me”.
Owners of listed buildings often cherish the historical and architectural significance of their properties, making a complete rebuild an unlikely consideration. However, when significant, approved renovations are underway, it is the homeowner’s responsibility to ensure the insurance policy covers the unique materials and construction methods required, as underscored by the report’s findings.
In situations where a total rebuild is necessitated due to catastrophic damage, having adequate insurance in place beforehand is essential.
The distinctive requirements of listed properties demand careful selection of materials and skilled tradespeople, highlighting the importance of accurately calculating the “building sum insured” to account for material price volatility and supply chain challenges.
Abode Insurance brings over two decades of experience in insuring listed properties, offering guidance on thorough preparation and comprehensive coverage in light of any changes in the building materials market.
It is imperative for homeowners to grasp the distinction between the market value of their property and the appropriate insured sum. Steve Hook, Divisional Director at Abode, emphasizes the critical nature of this understanding: “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 unique challenges of insuring listed properties are further compounded by the higher costs associated with specialist materials and tradespeople.
Hook advises homeowners to seek advice from a specialist broker to ensure their home insurance adequately protects their listed building.
Should you have any concerns or questions regarding your current insurance, particularly the building sum insured, you can reach out to the experts at Abode via info@abode-insurance.com or on 01622 476433.
¹ Monthly Statistics of Building Materials and Components September 2023 (publishing.service.gov.uk)
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