underinsurance touchstone

Underinsurance gap widening as costs increase

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.  Our partner, RebuildCostASSESSMENT.com‘s annual rebuild cost analysis is the Insurance industry’s most reliable benchmark around property sums insured.

The data results from almost 27,000 rebuild valuations carried out by RebuildCostASSESSMENT.com between Sep 2021 and the end of Aug 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%.

Touchstone Underwriting Rebuild cost assessment

To read and share the full report and download the infographic please visit RebuildCostASSESSMENT.com

Consequences of under insurance

  • Significant partial or total loss occurs, claim made
  • Loss adjusters identify inadequate Building Sums Insured
  • Average applied and pay-out reduced
  • Policyholders left without adequate funds to reinstate buildings

Building Sums Insured is not based on property market value OR what it details on the balance sheet. It should also not be a guess. Property is the most important asset owned and should be insured correctly.

Use a professional service such as Rebuild Cost Assessment (RCA) 
We highly recommend RCA and they are a trusted partner.