The task of ensuring the “building sum insured” accurately represents rebuild costs is a key concern in household insurance, a challenge that becomes more pronounced in the context of insuring listed buildings. Recent data shed light on the ongoing implications of this challenge.
The Department of Business & Trade’s latest report on building materials might seem promising at first glance, indicating a 2.3 per cent decrease in the “all works” category prices from the previous year¹. However, a more detailed look reveals concerning trends, especially for those involved in the restoration of listed buildings. There are noticeable increases in the prices of critical materials such as cement, alongside reductions in production, availability, and delivery compared to 2023, all of which are essential factors in calculating an accurate building sum insured.
The issue of underinsurance due to speculative estimations and the optimistic belief of “It will never happen to me” are significant hurdles, resulting in inadequate coverage and potentially disappointing claims outcomes.
For individuals residing in listed properties, the notion of completely rebuilding their home is often not considered, given the property’s inherent historical and aesthetic appeal. Nevertheless, when significant, approved renovations are underway, it’s imperative for homeowners to ensure that their insurance policy comprehensively covers the specific materials and building techniques required, a point underscored by the report’s findings.
In the unfortunate event that a listed property must be rebuilt from scratch due to extensive damage, having sufficient insurance coverage in place beforehand is crucial.
The particular requirements of listed properties demand a focused approach to the materials and skilled tradespeople involved in the work, underlining the necessity of accurately determining the “building sum insured” to account for fluctuations in material prices and potential supply chain issues.
Leveraging over two decades of experience in insuring listed properties, Abode Insurance goes beyond offering coverage to provide counsel on full preparedness and comprehensive protection in light of market changes in building materials.
Grasping the distinction between the market value of a property and the correct insured sum is essential. Steve Hook, Divisional Director at Abode, emphasizes the importance of this distinction: “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 complexity of insuring listed properties is heightened by the premium costs associated with specialized materials and skilled labour.
Hook recommends seeking the expertise of a specialist broker to ensure your home insurance effectively protects your listed building.
If you have any doubts or questions regarding your current insurance, particularly the building sum insured, reach out to the specialist team at Abode at info@abode-insurance.com or call 01622 476433.
¹ Monthly Statistics of Building Materials and Components September 2023 (publishing.service.gov.uk)
