House Rebuild Costs Are Through The Roof

Within the industry it’s well known that the house value isn’t the same as the rebuild cost, and that’s what matters if you need to make a claim – the total cost to rebuild your home. Like everything else, the costs of getting a house rebuilt, new roof, plaster, joinery, electrics etc and 100% compliant with modern safety regulations is going up. In many cases rebuilding one house in a terrace, or a semi, can mean extra costs, plus older houses obviously need to be upgraded as they are rebuilt from scratch after a fire or severe flood/subsidence.

Here’s the word from Go Compare;

Data from Go.Compare Home Insurance shows that average home rebuild costs have risen by over £100,000 in the last five years, increasing from an average of £194,000 in 2018 to £300,000 in 2023.

The insurance comparison site says it’s essential to update rebuild costs with your provider. If homeowners underestimate the cost or fail to update it, insurers may not pay out the full cost of repairs when a claim is made, only the amount quoted. 40% of homeowners told Go.Compare that they were not aware they needed to update the house rebuild cost on a home insurance policy.

Rebuild costs have risen by an average of £30,000 since 2022. By not updating their policy for the last year, buildings insurance policyholders could potentially lose out on a huge combined sum of £196.5 billion, should they need to claim.

The Building Cost Information Service (BCIS) recommends that rebuild costs be checked at least every five years. The insurance comparison site’s data shows that the average rebuild price has increased by £106,000 since 2018. Homeowners who have not updated their cost since could be looking at an even greater loss of over £100,000, should they need to claim. This equates to a whopping 694.5 billion pounds total, should all policyholders who were not aware they had to update their cost need to claim.

Ceri McMillan, home insurance expert at Go.Compare, said: “As house prices fluctuate, it’s important not to confuse your home’s value with its rebuild cost. The rise in rebuild costs is linked to inflation, as labour and raw materials increase in price. That’s why homeowners need to be aware that this figure needs updating regularly. If not, you could find yourself heavily out of pocket should you ever need to claim.

“The rebuild cost of your property is likely to impact your insurance premiums. It’s an estimate of how much it would cost to completely rebuild your home if it was destroyed by an unexpected event such as a fire or a flood, and unfortunately, due to rising prices, this is one reason customers may see premiums increase.”