Buildings Insurance

Setting the Buildings Sum Insured

It is important to remember that you when you declare the value of your building you are actually estimating the cost of rebuilding it should it be totally destroyed (this is what insurance companies call a total loss). Most insurance companies work out a rate to charge based on the location of the property and then apply it to the amount specified to rebuild the building (which is called the Buildings Sum Insured). It is therefore cheaper to insure a building that is worth less than an expensive building which is as expected.

It is equally important to make sure that you do not underestimate the cost of rebuilding your property. If you have paid a lower premium by underestimating the Buildings Sum Insured, then the insurer will normally only pay your claims up to the proportion of the building that you have insured. For example, if your property is worth £100,000 but you only declare a Buildings Sum Insured of £60,000; should you have a claim of £10,000 then the insurer will only pay you £6,000 as they will deem that you under-insured. It is important not to be caught out by this by being tempted by lower premiums for lower Buildings Sum Insured.

Professional Valuation

It is advisable to obtain a professional valuation for your property to ensure that you set your Buildings Sum Insured correctly. We have negotiated discounted rates with BCH Authentica who would be happy to help in this respect.