Safe as houses

Should I insure my house for the market value or rebuild cost?

Insurance can be complicated; but we’re here to make it straightforward and help you keep your family, assets and belongings safe. 

Here are some of the questions we’re often asked about home insurance, so you can feel confident that your house is protected in case the worst happens.  

Should I insure my building’s structure for the market value or rebuilding cost?

You should always insure your home for the rebuilding cost and NOT for the market value. 

The rebuild cost is the amount it would cost to completely rebuild your home if it was destroyed beyond repair – for example by fire, flood or a storm. You may think this is unlikely, but according to Government figures firefighters attended 167,150 house fires in 2017/2018. 

What happens if I need to rebuild following structural collapse due to poor renovation work? 

Every year, many people undertake significant structural work to expand their property, from basement cinema rooms to simple extensions. Very occasionally, renovations have bad outcomes. In this scenario, the rebuild value will include the price of labour and materials. This cost is usually lower than the home’s sale price or market value

If you base your policy on your home’s rebuild cost your home won’t be over-insured and you won’t pay higher premiums than necessary. 

How can I calculate the rebild cost? 

If you own a standard, brick-built home there are two ways to calculate your rebuild cost:

If you have recently bought your home the rebuild cost will be on your mortgage valuation or deeds.

If your home is made of non-standard materials (not brick-built) or has specialist period or special architectural features, the rebuild cost may be higher than its market value. This happens occasionally if, for example, the property is built from stone which is no longer locally available. 

In this case, insure your home against the higher rebuild cost not the lower sale price or market value to avoid any insurance shortfalls.

What does the rebuild cost include in this scenario?

The rebuild cost does not need to allow for the value of the site the property is built on, because this is not insured. However, it does need to allow for rebuilding your home in its current form, including the cost of clearing the site, materials and any professional fees incurred. 

How often should I review the rebuild cost of my home?

You should review the rebuild cost of your home each time you renew your insurance. If you renovate your home or build an extension, recalculate the rebuild cost and speak to your insurer to make sure you are fully covered. Your rebuild valuation will be affected by factors such as your home’s accessibility, age, listed status, scale and architectural complexity. 

How can Condor Private Clients help me? 

In the last 12 months, we have seen a large number of properties where the rebuild cost is considerably less than it should be. This tends to be for two main reasons:  

  • Our clients have estimated their rebuild cost using online comparison websites which don’t have accurate data for their postcode.
  • Our clients have renovated or extended their property and have not taken this into consideration. 

To help you, we work with insurers who will appraise your property either on a 20-minute phone call or in person in your home. You’ll be asked questions including whether you have intruder protection, an alarm system or smoke detection system, as well as if you have any valuable jewellery in the home and where it’s stored. They will also talk to you about the usual occupation and maintenance of your property.  

Following your appraisal, our insurers will use the latest digital technology to calculate the rebuild value of your property, drawing on data from survey companies like Ordnance Survey and other digital sources including Google maps, the Land Registry and their own data. They will combine this with consideration of your home’s history, structure and unique features to arrive at an accurate rebuild figure. 

If you’d like some support with getting an accurate rebuild cost for your home, and want to make sure your home insurance is in safe hands, please get in touch on

Paula Green is Founder and Partner of London-based independent insurance broker Condor Private Clients. Condor Private Clients works with individuals, families and employers to provide insurance advice, tailored products and access to fair, fast and fuss-free claims.

Posted 25th June 2020

Condor Insurance