Many homes are inaccurately insured

Analysis suggests that many UK homeowners don’t have the correct level of insurance, regardless of their property’s value.

According to the research, most Brits are either paying too much or too little for their home insurance. Concerningly, only 7% of UK properties are accurately insured, while 70% are underinsured and 23% are overinsured.

Understanding rebuild costs

The level of cover you need is based on the hypothetical cost of completely rebuilding your home if it was completely damaged. This helps the insurer to ascertain the maximum amount they would need to payout in the worst-case scenario. The rebuild cost can often be confused with the sale price of your home, but these are very different figures - for insurance purposes, you need to consider the price of labour, materials and other associated costs.

Lower-value properties

Owning a lower-value home does not necessarily mean it’s easier to insure accurately. In fact, these properties are the most likely to be uninsured – the research shows that 78% of properties insured for between £250,000 and £750,000 do not have sufficient cover in place. This shortfall is often because homeowners rely on rough estimates of the rebuild costs, rather than obtaining a professional assessment. Over time, rising construction costs could cause this shortfall to widen further, increasing the amount that the policyholder has to pay in the event of a claim.

Higher-value properties

At the other end of the market, overinsurance becomes more common as sums insured rise. Among properties insured for between £5m and £10m, 49% are overinsured, while 41% are uninsured.  This suggests that, as property values rise, homeowners become more cautious about underinsurance and, as a result, overestimate rebuild costs. While this approach may feel safer, it can lead to unnecessarily high premiums.

Expert opinion

Johnny Thomson, Head of Strategic Planning at RebuildCostASSESSEMENT.com, commented, “These findings reinforce the need for regular rebuild cost assessments at every level of property value. Accurate valuations remove uncertainty, support better decisions, and help ensure claims outcomes meet expectations.”

Seek advice

It doesn’t matter how much your property is worth – the research indicates that inaccurate insurance is a problem across the board. Seeking professional advice now could save you from paying more than you need or prevent an expensive surprise when you make a home insurance claim. Get in touch with us to review your level of cover.

As with all insurance policies, conditions and exclusions will apply

Sources:

https://www.rebuildcostassessment.com/post/why-insurance-accuracy-fails-at-every-level-of-property-value