As a landlord, one of the most important considerations when arranging insurance for your rental property is ensuring that your rebuild cost (often referred to as the reinstatement cost) is accurate. At WTJ, we regularly speak with landlords who are unsure what this figure should be – and understandably so. It’s a technical area, but getting it right is crucial for protecting your investment.
The rebuild cost is the amount it would take to completely rebuild your property from the ground up if it were destroyed – for example, by fire or flood.
It is not the same as your property’s market value. In fact, the rebuild figure can come in lower than the market value in some locations, but in other cases (e.g. listed buildings), it can be much higher.
A rebuild figure should consider:
Demolition and site clearance
Professional fees (e.g. architects, surveyors, legal costs)
Labour and materials required to reinstate the property
Special features of the building, such as period details or listed status
As insurance brokers, we can guide you through the process, but we cannot provide a rebuild figure ourselves. Instead, you have several options:
Rebuild Calculator – Tools such as the BCIS (Building Cost Information Service) calculator can provide a rough estimate based on property type and size.
Professional Surveyor – Hiring a qualified surveyor gives you the most accurate and reliable assessment, particularly for larger or unusual properties.
Rebuildcostassessment.com – An increasingly popular service offering desktop-based assessments carried out by professionals at an affordable price.
If your rebuild cost is set too low, you may find yourself underinsured. Insurers apply what’s known as the average clause:
👉 Example: If your property’s true rebuild cost is £400,000, but you have insured it for only £200,000 (50%), any claim you make will also be reduced by 50%.
So, a £50,000 claim would result in only £25,000 being paid out.
This can leave landlords significantly out of pocket at the worst possible time.
Rebuild costs are not static. They can vary considerably depending on:
Location – Labour and material costs differ across the UK.
Age of the property – Older or period buildings can require specialist materials and trades.
Listed status – Additional planning permissions, materials, and craftsmanship can greatly increase rebuild costs.
Construction type – Non-standard methods (e.g. timber-framed or thatched roofs) can be more expensive to rebuild.
Even if you’ve had a professional rebuild assessment, it’s important to remember that costs change over time. That’s why sums insured should be index linked – adjusted annually to reflect inflation and building cost changes – and reviewed regularly.
At WTJ, we work with landlords to ensure their policies are set up correctly, tailored to their needs, and reviewed on a regular basis. While we cannot provide the rebuild figure, we can:
Point you in the right direction to obtain one
Advise on how to structure your insurance to avoid underinsurance
Ensure your sums insured are index linked where appropriate
Help you navigate claims should the worst happen
Your rental property is one of your most valuable assets. Don’t leave it exposed to the risks of underinsurance.
Article by David Woollin, WTJ.
For tailored advice and guidance on protecting your rental property portfolio please contact us on 01924 871111 or email insurance@wtj.co.uk or alternatively leave your details below and one of our staff will make contact with you.
