Landlord’s insurance is designed to protect your property against damage, however many landlords purchase landlords insurance policies without ensuring they are covered for the correct levels of risk.
So you’re a landlord, you’ve got a property, its ready to receive tenants except for one small detail, you haven’t got a landlords insurance policy yet. Being the discerning individual you are, you boot up your computer and do a quick search for a landlord’s insurance policy. After picking the one with the least gaudy banner, proclaiming that your quote will be “ready in 60 seconds flat!” you begin answering the questions when suddenly, you are asked to enter your rebuild value, and a decision looms, do you
a) Panic!
b) Enter the price you paid for the property
c) Enter the value of the property when it was built.
If you’ve used any of those particular methods in the past I have some bad news for you, they’re all wrong! There are actually only two methods of calculating rebuild value, get a chartered surveyor to survey your property or use the free online rebuild calculator on the BCIS’s website. While the surveyor will be more accurate and can value properties the calculator cannot, a surveyors fees can be quite expensive so it makes sense to check out the BCIS’s free calculator first.
A correct rebuild sum includes the cost of the physical materials required to rebuild your property, the cost of any necessary demolition work required before the property can be rebuilt, the costs of the necessary labour and any permanent fixtures or fittings, for example the oven or bath. Even if you know how much the property was built for, it pays to keep your values as up to date as possible as labour costs and materials are unlikely to be the same now as they were sixty years ago!
Ensuring you have the correct rebuild sum is important as it ensures that you are neither underinsured and left out of pocket in the event of a claim nor over-insured and essentially paying money for nothing, a situation your landlords insurance provider may enjoy, but you not so much. It is also important that you do not take a rebuild figure from your landlords insurance provider, as they are likely not qualified to make such a decision for you.
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