House Rebuild Cost and Sum Insured: How to Get the Figure Right
The sum insured on a house insurance policy is the cost of rebuilding the house from the ground u...
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Buildings cover, contents cover, and what each includes
Buildings insurance covers the structure and everything you could not take with you if you moved: fitted kitchens and bathrooms, garages and sheds, walls, gates and fences. It usually covers fire, storm, flood and subsidence, with restrictions, damage caused by vehicles or animals, and the cost of somewhere to live if the house cannot be lived in. It usually does not cover flood or subsidence where your home is in an area where either is likely, damage caused by someone working in your home unless they carry their own public liability insurance, or any claim below the excess. There is no legal requirement to hold it, but if you have a mortgage your lender may require buildings insurance to cover the rebuild cost.
Contents insurance covers what you would take with you: furniture, appliances, clothes, electronics and personal belongings. The CCPC says there is usually a limit per single item, so list valuables separately if needed. Accidental damage to household equipment is usually covered, sometimes at a higher premium, and belongings you carry outside the home usually are not unless you have specified them. Check which applies before comparing prices.
If you extend or improve the house, tell the insurer: the buildings cover may need to rise to match.
Rebuild cost, underinsurance and what sets the price
Rebuild cost, not market value. Buildings cover is based on what it would cost to rebuild the house, which is not the same as what it would sell for. The SCSI House Rebuild Calculator gives a minimum estimate for estate-type houses; for a one-off or period house, get a chartered surveyor’s estimate. Check the figure against your policy every renewal, and especially when building costs have risen.
Underinsurance. If the house is insured for less than its rebuild cost, a claim may be paid in proportion. The SCSI’s example: insured for three-quarters of the rebuild cost, you may receive only three-quarters of a claim, whether it is a repair or a total loss, and the rest is yours to cover. The CCPC notes that many insurers use indexation, raising the sum insured each year in line with inflation. Check the figure yourself as well.
What sets the price. Three things, according to the CCPC: the amounts insured for buildings and contents, where the house is, since urban homes carry more burglary claims than rural ones, and the type of cover and the discounts you qualify for. You may get a discount for three years without a claim, for an alarm, with more for a monitored one, and for agreeing to a higher excess. Claims below the excess cannot be made, and the excess for subsidence is normally higher than for other claims.
Comparing quotes. Compare like with like: the same sums insured, excess and options on every quote. The CCPC’s advice is that the policy with the lowest premium is not always the right one, and to read the policy details before you sign. The CCPC also notes that an insurer cannot refuse a claim because you made a genuine mistake or gave incomplete information when applying; if you give fraudulent information, it can cancel the policy and refuse the claim.
Renting the house out? See our landlord insurance page. To talk it through, call 0818 92 92 42, Monday to Friday, 9am to 5.30pm.
Sources: CCPC – home insurance; SCSI – House Rebuild Calculator. Last reviewed September 2026.
