Why a property’s sale price is not its rebuilding cost, and what to prepare when reviewing the insured value.
A property’s market value and the cost of rebuilding it are different measures. Using a sale price as the insurance figure can miss important elements of the rebuilding exercise.
What a rebuilding assessment considers
RICS guidance explains that reinstatement assessments consider the building and circumstances affecting reconstruction. Demolition, access, materials, professional fees and unusual features can all influence the result.
Prepare for your renewal review
- Find the date and basis of your last professional assessment.
- Note extensions, alterations or changes in property use.
- Check the declared value, sum insured and any inflation-related provisions with your broker.
- Review rental income and the period of protection alongside the building figure.
Why an estimate deserves attention
Where an average clause applies, underinsurance can affect the amount paid on a claim. The calculation and consequences depend on the policy wording; they are not identical across all policies.
Index linking may help adjust a figure over time, but it does not establish that the starting value was correct or account for every alteration.
We can explain how your policy uses the figures and discuss whether an up-to-date assessment from an appropriately qualified professional would help. A broker’s review is not a substitute for a professional reinstatement assessment.
Sources and further reading
- RICS: Why building cover relies on correct reinstatement cost
- RICS: Reinstatement Cost Assessment of Buildings
Published 18 March 2026. Updated 21 October 2026. General information, not an assessment of your individual insurance needs. Cover depends on the policy and insurer agreement.