If you’ve ever applied for a home insurance policy, you may have been asked about the rebuild cost of your property. So what is a rebuild cost and how do you work it out?
What is a rebuild cost?
Put very simply, your rebuild cost is the amount of money you’d need to rebuild your home from the ground up (including any driveways, boundary walls and outbuildings). This includes the cost of labour, materials, installations for water, gas and electricity, as well as planning and architects fees.
Providing an accurate rebuild estimate will make sure your home is properly insured. If the unthinkable happens, underinsurance could leave you liable for any difference in cost, so it’s always best to get an accurate assessment to cover your potential losses.
In most cases, the rebuild cost usually comes in below the market value of your home, because it doesn’t account for factors like land and location. However, if your home is listed or was built with unusual materials or features, this may not be the case.
How to calculate the rebuild cost
If you have bought your home recently, the rebuild cost should appear on your mortgage valuation or deeds.
If not, there are two ways to calculate your rebuild cost:
Use the Building Costs Information Service (BCIS) calculator for guidance
Hire a chartered surveyor to assess the property for you
You can find a chartered surveyor on the Royal Institution of Chartered Surveyors website.
How to use the BCIS calculator
The BCIS calculator sits on the Association of British Insurers (ABI) website - it’s a simple tool from a trusted body.
Simply enter your email address to get started, and make sure you have the external floor area of your property to hand.
The calculator takes into account clearing the rubble from an existing structure and is not applicable for houses containing hazardous materials, such as asbestos.
Work out the square metres yourself
Follow these simple steps to help calculate the floor area of your home:
1. From the outside, measure the length and width of the ground floor of your property. Multiply these two figures together to give you the downstairs floor area.
2. If the upstairs of your home is the same size and shape as the downstairs, you can simply double the ground floor value.
3. If the upstairs space is different, you will need to measure it separately, before adding to the ground floor area measurement.
4. If your home has any more floors you can follow step 2 or step 3 again, depending on which one is relevant.
Once you have the total square footage of your home, you’ll be ready to use the BCIS calculator by following its instructions. BCIS also provide further instructions for measuring your home if you need any more help.
How do I calculate my Rebuild cost if I live in a flat?
In England and Wales, flats or maisonettes are usually block insured under a single policy. It’s likely that you already pay for buildings insurance under a service charge, so always check your building documents before taking out any new policy.
In Scotland, it is more likely that you are expected to insure your own single flat for buildings cover.
In the event that you do need to insure a single flat or maisonette, you may want to hire a surveyor rather than rely on the calculator, as construction methods for flats vary.
When should you update the rebuild cost
of your home?
You should review the rebuild cost of your home every time you renew your insurance policy, as the costs of materials and labour change over time.
Any building work you may have had done – including extensions or renovations – could also affect the rebuild cost of your home, so it’s vital you declare it.
If you're aware of your rebuild cost increasing, John Lewis Finance ask that you let us know within 30 days.
If the rebuild cost of your home increases and you don’t update the value of your home insurance, you could well find yourself underinsured with an insufficient amount to cover the rebuild cost.
Be sure to speak to your insurance provider before taking on any renovations that might impact the value of your home.
Can I have my rebuild cost calculated for me?
If you are covered by Specialist Home Insurance from John Lewis, and you have not recently had a full survey, we may decide to provide a desktop valuation at your underwriter's discretion to ensure you have the right cover. This is an independent survey of your property conducted remotely using ordinance survey data and various other tools.
A detailed report is then produced with recommendations for accurate rebuild figures based upon the property’s dimensions, age and construction materials.
Terms, conditions, limitations, exclusions and eligibility acceptance criteria apply.
John Lewis Finance, John Lewis Home Insurance and John Lewis & Partners are all trading names of John Lewis plc. Registered office: 171 Victoria Street, London SW1E 5NN. Registered in England and Wales (Registered Company Number 233462). John Lewis plc is an appointed representative of Munich Re Digital Partners Limited, a company authorised and regulated by the Financial Conduct Authority to carry on insurance distribution activities.
John Lewis Finance, John Lewis Insurance and John Lewis & Partners are all trading names of John Lewis plc. Registered office: 171 Victoria Street, London SW1E 5NN. Registered in England and Wales (Registered Company Number 233462). John Lewis plc is an appointed representative (Financial Conduct Authority no. 416011) of Covea Insurance plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (registration no. 202277). John Lewis Specialist Home Insurance is underwritten by Covea Insurance plc. Registered Office: A&B Mills, Dean Clough, Halifax, HX3 5AX. Registered in England and Wales (registration no. 613259).