When arranging buildings insurance, one of the most important figures you may be asked for is your home’s rebuild cost.
This is not the same as the market value of your property. It is the estimated cost of rebuilding your home from scratch if it were destroyed beyond repair.
Getting this figure right matters. If your rebuild value is too low, your home may be underinsured. This could mean there is not enough cover to meet the full cost of repair or rebuilding after a serious claim. In some circumstances, your insurer may also reduce the amount paid, depending on the terms of your policy.
Rebuild costs have also changed significantly in recent years. The cost of materials, labour, professional fees and other building-related expenses has risen, meaning a figure that seemed suitable several years ago may no longer reflect the true cost of rebuilding today.
This guide explains what rebuild cost means, why it is important, and when you may need specialist advice.
Your home’s rebuild cost is the estimated amount it would cost to completely rebuild the property if it were destroyed.
This can include:
For buildings insurance, the rebuild cost helps determine the amount of cover needed for the structure of your home.
It is important to remember that this is only about rebuilding the property. It is not the same as what your home would sell for on the open market.
A home’s market value is the amount it might sell for. It can be affected by location, land value, local demand, transport links, schools and many other factors.
A home’s rebuild cost is different. It focuses on the cost of reinstating the building itself.
For many standard properties, the rebuild cost may be lower than the market value. However, this is not always the case. Some homes may cost more to rebuild than their sale price, especially if they include specialist materials, period features or unusual construction methods.
For example, a listed building, timber-framed home or stone-built property may need specialist labour and materials. These can increase the cost of rebuilding.
For more detail, see our guide to the difference between market value and rebuild value.
Rebuild costs are not fixed. They can rise over time as the cost of labour, materials and professional services changes.
In recent years, rebuild costs have increased sharply. According to BCIS, annual growth in the ABI/BCIS House Rebuilding Cost Index was 19.4% at the end of 2022. BCIS later reported that the index was 40% higher in January 2024 than it was in January 2020.
That does not mean every property’s rebuild cost has increased by exactly the same amount. Individual homes can vary depending on size, construction, location, materials, access and specialist features.
However, it does show why it is important not to rely on an old rebuild estimate for too long.
Underinsurance can happen when the amount of cover is not enough to meet the full cost of rebuilding or repairing your home.
For example, if your home would cost £400,000 to rebuild, but your buildings insurance is based on a rebuild value of £250,000, there may be a significant shortfall.
This can create problems if you need to make a claim. Depending on the policy wording and the circumstances, your insurer may reduce the amount paid. Some policies include an “average clause”, which can reduce a claim in proportion to the level of underinsurance.
This is why it is important to provide a rebuild value that is as accurate as possible, based on the information available to you.
The aim is not to overestimate or underestimate, but to make sure your buildings cover reflects the likely cost of rebuilding your home.
Not all homes fit standard assumptions.
Online rebuild calculators can be useful for many standard properties, but they may not always be suitable for homes with unusual features or construction.
Extra care may be needed if your home is:
In these cases, the cost of rebuilding may be affected by specialist labour, planning requirements, conservation rules, bespoke materials or the need to rebuild using traditional methods.
If your home is non-standard, listed or has special architectural features, it may be sensible to speak to a chartered surveyor for a more accurate rebuild assessment.
There are several ways to check or estimate your rebuild cost.
For many standard homes, a rebuild cost calculator can provide a useful starting point. These tools usually ask for details such as the property type, age, construction, number of floors, floor area and postcode.
However, calculators are usually based on standard assumptions. If your home is unusual, listed, made from non-standard materials or has specialist features, the result may not be accurate enough on its own.
If you bought your home recently, your mortgage valuation, homebuyer report or building survey may include a rebuild figure.
This can be useful, but it may still need reviewing if the report is several years old, if rebuild costs have changed, or if you have altered the property since then.
A professional rebuild valuation from a chartered surveyor may be more suitable if your home is complex, listed, high value, non-standard or difficult to assess.
Although there is usually a cost for this, it can provide a more reliable figure than a general online estimate.
You should also review your rebuild value if you have made changes to your home, such as:
These changes may affect the cost of rebuilding the property.
For more guidance, see our FAQ on how to find out the rebuild value of your home.
In many cases, you may be asked to provide or confirm a rebuild value when arranging buildings insurance.
Some policies may offer a set buildings cover limit, while others may ask for a specific rebuild estimate. Even where a cover limit is provided, it is still important to make sure it is enough for your property.
Your insurer or broker may be able to explain what information is needed. However, the declared rebuild value should be based on the best information available to you.
If you are unsure, especially if your home is non-standard, you may wish to seek professional advice.
For more detail, see our FAQ: Do I need to give a rebuild estimate to get buildings insurance?
It is a good idea to review your rebuild value regularly, especially at renewal.
You should also check it if:
Reviewing your rebuild value does not have to mean starting from scratch every year. But it is worth checking whether the figure still feels suitable, especially if there have been changes to your home or wider building costs.
At Intelligent Insurance, we help customers arrange home insurance for a wide range of properties, including listed buildings, period homes, unoccupied properties, homes undergoing renovation and properties made from non-standard materials.
Get a quote online or speak to our UK-based team.
Market value is what your home might sell for. Rebuild cost is the estimated cost of rebuilding the property if it were destroyed. The two figures can be very different.
Yes. This can happen if your home has specialist materials, listed status, period features or unusual construction. In some cases, the cost of rebuilding may be higher than the property’s sale value.
No. A calculator can be useful for many standard homes, but it may not be suitable for listed buildings, non-standard construction, unusual materials or architecturally complex homes.
Your insurer or broker may provide guidance, but the rebuild value you declare should be based on the best information available to you. If you are unsure, you may wish to seek advice from a chartered surveyor.
If your rebuild value is too low, your home may be underinsured. This could mean there is not enough cover to meet the full cost of repair or rebuilding. In some circumstances, your insurer may reduce the claim payment, depending on the policy terms.
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