Concerns grow as an increasing number of UK properties are now underinsured. With the gap between property rebuild costs and their sums insured widening at an alarming rate.
has complied figures from their annual report on rebuild costs and has concluded, from almost 27,000 rebuild valuations carried out between September 2021 and the end of August 2022, that
83% of these properties were underinsured, up from 80% in 2021, and that they were insured for a mere 66% of what they should have been - a significant and worrying gap!
The gap was found to be widest amongst properties insured for up to £500,000, which, on average, are covered for merely 51% of their rebuild cost. Those insured for more than £2 million fare slightly better but are still only covered for an average of 70% of what they would reliably cost to rebuild.
(Are buildings ever over
-insured? Yes, but only 13% of the buildings assessed by RebuildCostASSESSMENT were deemed to be so, by around 132%, on average.)
Why such a significant shortfall?
director, Will Molland MCIOB AssocRICS, says: “Given the huge rise in the cost of buildings materials, as well as associated costs such as professional fees, it isn’t really surprising that the underinsurance gap is widening.
“These figures do paint a worrying picture for many property owners, who are exposed to a significant shortfall in claims payments should they suffer a loss. Let’s be clear, UK buildings are on average covered for just two thirds of what they should be, according to our extensive data.”
What can Ascend do to help?
We take this ongoing issue very seriously and can help property owners reduce their risk of underinsurance.
Manager Director of Ascend, Matthew Collins, says: “We understand that our clients need support and protection when it comes to the insurance of their properties and commercial buildings, and how important it is to shield them from severe financial pitfalls. We would like to see buildings’ underinsurance eradicated in the UK. But until then, we’re here to help make sure it doesn’t happen to you.”
Download Underinsurance Guide
Other blogs that may be of interest:
Legal News – Three Items of Interest for the Construction Community
Are you fully aware of your business’s exposures?
Important changes in the home claims market