Insight

Is your commercial property insured enough for a rebuild?

7 May 2024
Insight

Is your commercial property insured enough for a rebuild?

Did you know that more than 9 out of 10 buildings in the UK are insured for the wrong amount? 83% of buildings are underinsured and 13% are over insured. Underinsured buildings can result in less money being paid out in the event of a property damage claim being made.

What’s worse is with rising construction costs, the issue of having an underinsured property comes with even more dire consequences and you could find yourself having to factor in your own finances to rebuild property if your insurance doesn’t effectively cover rebuild costs. According to the Builders Merchants Federation (BMF), prices have risen by between 10% and 15% for products and materials this year. However, some products, such as timber, have seen prices go up by 50% and by as much as 100% for oriented strand board (OSB) and other sheet materials, which are all key housebuilding components.

Between July 2020 and July 2021, the cost of materials rose by 20%, according to the Office for National Statistics (ONS). The RICS’ BCIS general building cost index is forecast to be 8.8% for the year to September 2021, up from 3.6% for the year to March 2021.

Because of these quickly rising costs, building insurance can quickly become outdated, and some people even avoid insuring their properties all-together, a decision that can lead to a catastrophic loss of finances.

We have been working closely with RebuildCostAssessment.com to ensure that nobody goes unprepared when it comes to properly insured properties. Together with RebuildCostAssessment, we can organise for a ‘regulated by RICS’ professional who knows all about rebuild costs to assess your property and report back to us in order for us to ensure proper cover is put in place for you. For more information regarding getting the proper cover for you and your properties, get in touch with us on 0161 393 7111.