Underinsurance continues to be a big issue, with a greater proportion of properties are now underinsured and the gap between property rebuild costs and the amount buildings are currently insured for in the UK is widening.
The findings arise from the insurance industry’s most reliable benchmark around property sums insured, RebuildCostASSESSMENT.com’s annual rebuild cost analysis and infographic. The data results from almost 27,000 rebuild valuations carried out by RebuildCostASSESSMENT.com between September 2021 and the end of August 2022.
This year’s infographic highlights how 83% of these properties were found to be underinsured, up from 80% in 2021. On average, these buildings were insured for just 66% of what they should have been. The percentage last year was 68%, which shows how the buildings underinsurance gap is widening in the UK.
This gap is biggest among buildings insured for up to £500,000, which are on average only covered for 51% of their rebuild cost. Buildings insured for more than £2 million are closer to what they should be, but still only covered on average for 70% of reliable rebuild cost.
When it comes to overinsurance, 13% of buildings assessed were covered for too much this year, on average by 132%.
RebuildCostASSESSMENT.com director, Will Molland MCIOB AssocRICS, commented: “Given the huge rise in the cost of buildings materials, as well as associated costs such as professional fees, it isn’t really surprising that the underinsurance gap is widening.
“These figures do paint a worrying picture for many property owners, who are exposed to a significant shortfall in claims payments should they suffer a loss. Let’s be clear, UK buildings are on average covered for just two thirds of what they should be, according to our extensive data.”
Will added: “On a more positive note, over the past 12 month we’ve helped the owners of almost 27,000 properties reduce their risk of underinsurance. We know from the unprecedented demand for our services that the insurance industry is taking this issue very seriously and recognises their customers need support and protection from what can be severe financial and emotional consequences.
“We’d like to thank our broker and managing agent partners in particular for working with us on our ongoing mission to eradicate buildings underinsurance in the UK.”
Nigel West, Managing Director at Fiveways Insurance says “we are really concerned for our clients given the potentially devastating consequences of being underinsured . We have had recent examples of our clients being so thankful to us that we were able to arrange a Rebuild Cost Assessment survey when they discovered they were significantly underinsured.”
Mr West continues “this is why we have teamed up with RebuildCost Assessment to provide our clients with a cost effective solution that includes a guarantee with the rebuild cost assessment survey. For a limited time we are offering these RICS surveys at a reduced price of £150.00”
Please contact Fiveways Insurance on 01952 812380 if you are concerned about the adequacy of your Home or Commercial building sum insured.
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We have very many client’s who have had to move to working from home, or had to change their normal office commute to another office and all these things would normally be notifiable to your insurer and may affect your policy.
However, Insurers have come together and issued a joint agreement to accommodate the changing situations that individuals find themselves in.
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