How do you calculate the Building Sum Insured under a Home Insurance Building Policy?

 

Answer:

 

It is the responsibility of the Insured to set the Sum Insured for the Buildings. The Sum Insured should reflect the Cost of Rebuilding the home including outbuildings garages paths and paved areas walls fences tennis courts swimming pools.

 

It should also include the cost of demolition temporary support and Professional Fees.

 

The sum insured does not reflect the market value of the premises which generally has no association with a properties rebuilding cost.

 

If the property is mortgaged you may be advised by your lender that the rebuilding cost should be not less than a certain figure. Again this is only advisory and the responsibility of setting the sum insured is yours.

 

Effect of Underinsurance

 

In the event that the sum insured is not adequate Insurers may not pay the full value of any insurance claim. They may pay the cost of repairs net of an allowance for wear and tear alternatively dependant upon the policy wording they may pay a proportion of the loss based upon the degree of underinsurance. For this reason it is important to adequately assess the sum insured.

 

Help With Establishing The Building Sum Insured

 

To assist in establishing the Building Sum Insured both the British Insurance Association (BIA) and the Building Cost Information Service (BCIS)of the Royal Institute of Chartered Surveyors (RICS) have produced a system to simplify the calculation of the Building Sum Insured.

 

All you have to do is measure the total floor area of your property and complete the forms provided on the site (full details are given).

 

This method is only suitable for buildings constructed after 1900 less than 320 m2 and for non Listed properties. For further information on Listed and Period Properties see the link (Listed Buildings and Period Properties on the navigation bar) which specifically deals with these kind of properties

 

A  Quick link' to the site is below

 

BIA / BCIS/ Rebuilding Cost

 

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Home
What is covered under a Home Insurance Policy
◦ What is covered under a Building Policy
◦ What is covered under Accidental Damage Building Policy ?
◦ How do you calculate the Building Sum Insured
◦ Building Sums Insured for Listed Building / Period Properties?
◦ What is covered under a Contents Policy
◦ Other Cover Under A Contents Policy?
◦ What is covered under Accidental Damage Contents Policy ?
◦ How do you calculate the Contents Sum Insured?
How do I get a Home Insurance Quotation?
◦ What is a Home Insurance Proposal Form?
How do I make a claim under a Home Insurance Policy?
◦ What Happens When you make a Contents Claim?
◦ What happens when you make a Building Claim?
How do I make a Complaint under a Home Insurance Policy?
Home Insurance Forum
Home Insurance Useful Contacts
Home Insurance Glossary of Insurance Terms
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