The True Cost Of Rebuilding Your Property In Case Of An Emergency

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You might have recently lost your home to a fire, flood, or natural disaster that resulted in the unfortunate destruction of your property and your valuable possessions. Or perhaps you recently purchased a new house or apartment and you are thinking of getting home insurance in case something goes wrong. In both cases, you have to think about how much rebuilding your property will cost.

So, in case you have recently suffered the loss of your property, it might be best to consult with your insurance company about the approximate cost of the rebuild. Or, if you’ve purchased new property it’s important to get the proper home insurance to protect yourself from huge monetary losses. The statistics say that over a quarter of all homes in the UK do not have any form of home insurance. It is, therefore, crucial to accurately assess the cost of rebuilding your property in order to avoid overpaying or losing money in case of an emergency.

What Is The Cost Of Rebuilding Your Property?

The rebuild cost is the amount of money you will need to completely rebuild your property from the ground up. It mainly consists of two factors – price of materials and cost of labour.

The overall price of the materials can vary based on multiple factors such as property layout, size, and components. If you are unsure about how much the labor for the associated rebuild will cost you, you can get a quote for different trade jobs at a site like MyJobQuote to get an idea about the approximate price. Once you have an estimate, you can officially start your project.

What Can Affect The Cost Of Rebuilding Your Property?

Price Of Materials

Many different aspects of your home will end up affecting the cost of the rebuild since the amount and type of materials used will be different in each situation. The basic elements of your home that will go into this equation are:

  • Your home’s size (total square meters);
  • Number of rooms (including an attic);
  • Number of floors;
  • Exterior wall construction (ex. brick);
  • Roof materials;
  • Type of walls and windows;
  • Exterior decorations and details (ex. porches, decks, fountains);
  • Interior decorations and details (ex. furniture, fireplace, kitchen island, technology systems);
  • Overall quality of materials.

Cost of Labour

How much you will end up paying for trade jobs depends on a number of factors. The most important ones to consider are the type of tradesmen you will need and the location of your home. Tradesmen rates vary across locations depending on the living standards in the areas, and they can increase depending on the complexity of the job.

Is The Rebuild Cost Different From The Market Value Of Your Property?

The cost of rebuilding your property will differ from its market value, so it is important not to confuse the two.

The main difference between the rebuild cost of your property and its market value is that the market value is influenced by geographical factors. The desirability of the location and the land value are subject to market supply and demand, the school ratings in your area, neighborhood safety, etc.

When you speak to a home insurance agent, make sure that the insurance you are purchasing covers the ‘replacement value’ of your home, not just its purchase value. Since the market value of the house will usually be higher because of the factors mentioned above, choosing an insurance policy that covers the replacement value of your home will save you from overpaying for your insurance. If the opposite is true, then the insurance will cover the full extent of your costs.

Replacing Your Household Possessions

Your home does not only consist of its basic construction such as walls, flooring, and appliances. The items inside your house, such as your decorations or personal possessions, are what make up the sentimental value of your home, and at the same time can increase your monetary loss.

If your home is destroyed, you might forget about or underestimate the value of your possessions. It is important, however, to know their approximate value to file an accurate 

insurance claim that will cover their cost. Be sure to check what your options are so you can cover as much of your cost as possible.

One way to keep track of the item value in your home is to invest in a home inventory. The inventory would consist of photos and purchase prices (or receipts) of your items. You can either store these digitally or keep hard copies. In any case, providing a list of these items to your insurance agency will help you file an accurate and supported inventory.

Should You Update Your Rebuild Cost After Renovations?

If you renovate your property, this should usually be factored into the rebuild cost. This depends, however, on whether you make any fundamental changes to the structure of your property.

If you build an extension or do a loft conversion, the rebuild cost will likely increase. However, if your renovations consist of an upgrade to your decorations, such as a more expensive kitchen, then you might factor this in with the replacement value of your items.

If your rebuild cost increases without your insurance increasing as well, you could wind up underinsured and therefore have to cover the difference yourself. You should therefore inform your insurance provider of any changes so they update your policy in a way that reflects the increase in value.