This is quite tricky. Most people think they need to insure for what their house would sell for. This can be quite different from the sum insured for insurance purposes. Market values are determined by all sorts of factors, such as location, catchment areas for good schools, public transport links, countryside views and so on.

The sum insured for insurance purposes should be the cost of rebuilding the property should it be destroyed. This has to include removal of debris and any architects or planning fees required for the rebuild to go ahead.

If you have recently purchased a property and had any type of survey carried out, the surveyor will have stated a rebuilding or reinstatement amount. If you have owned a property for some time – 5 years or more – it really would be sensible to obtain an updated survey report.

Over-insurance is a simple waste of money. Under-insurance could mean that, when it comes time to claim, you could receive much less than your costs or – in extreme cases – have your claim refused.

As insurance brokers, we are not experts in building valuations. We would advise – as stated above – obtaining the services of a qualified surveyor or there is a calculator on the ABI/RCIS website which is good for standard properties.