Building sum insured (BSI): Is your current insurer really doing their job?

By Abode Insurance

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When those dreaded renewal documents come through from your insurer, it’s all too easy to just look at the price and renew (or question it!). However, there’s something in the paperwork that you need to check every year, and it could be detrimental if you don’t.

Your “building sum insured”, also known as rebuild value, is the total cost of rebuilding your property from scratch, including any professional fees such as builders or architects that you may have to pay. You can watch our video that explains in more detail here.

Getting this figure right on your insurance policy is crucial to ensuring that if the worst happens and you suffer a severe loss or damage to your property, your policy will fix it.

One thing you must do when you receive your renewal documents is to confirm that your building sum insured has increased from the figure the previous year. The common misunderstanding is that if you haven’t made any changes to your property, then the cost to rebuild it will stay the same however, this is not the case. Whether it’s an increase as small as two per cent, or as high as twenty per cent, insurers should apply an increase each year that reflects inflation and changes in the market. It’s important to remember that this is completely normal.

In recent years, the effects of Brexit and Covid drastically affected the cost of building materials – which in turn has made it more expensive to rebuild your home if it’s damaged or destroyed. This, coupled with ever increasing index linking, has meant that building sum insured figures are now much higher than they used to be, so don’t be surprised to see a relatively substantial increase on that figure.

If you receive your documents from your insurer and the sum insured for your buildings hasn’t changed, make sure you query this with them to find out why.

At Abode, we understand the importance of getting the figures right on your policy, so it does what it’s made for – protects you and your listed property. You can contact us today for advice or a free quote on 01622 476433 or info@abode-insurance.com.

Live with character. Insure with confidence.

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Abode is a trading name of Howden UK Brokers Limited, which is authorised and regulated by the Financial Conduct Authority No. 307663. Registered in England and Wales under company registration number 02831010. Registered Office: One Creechurch Place, London, EC3A 5AF. Calls may be monitored and recorded for quality assurance purposes.