The importance of keeping your building insurance up to date
The importance of updating building insurance to mitigate risks and make sure you have comprehensive coverage
Building insurance covers the cost of rebuilding your property if it suffers damage – right up to it having been completely destroyed.
In ‘normal’ times, your rebuild value and premium is likely to increase gradually each year (usually by around three per cent), to reflect the steadily rising cost of labour and materials.
However, with rebuild costs having spiralled over the last couple of years - firstly as a result of the pandemic and then due to the recent high rate of inflation - it’s vital to make sure your policy still provides adequate cover.
The best way to do that is to have an ‘index linked’ landlord insurance policy.
This makes sure the rebuild cost for your property is automatically adjusted, so you don’t have to review it yourself and the value of your policy is always protected against rises in costs in the wider economy.
While index linking gives you peace of mind you’re always properly covered, the bad news is that when costs increase by a lot, so does your premium.
Annually
Bi-annually
Every few years
Never
Nine out of 10 properties are insured for the wrong amount, with the majority of these being underinsured. The latest research by Rebuild Cost Assessment (RCA) shows that while 13% of UK residential properties are overinsured, 82% are underinsured, which can severely reduce the amount paid out following a property damage claim. According to RCA, on average underinsured buildings are covered for just 63% of the amount they should be. So I would recommend that you make sure your property is fully covered and that your sums insured are still adequate.
At Total Landlord Insurance, we have seen a significant increase in landlords whose rental properties are underinsured, putting them at risk of serious financial loss. Check out our ultimate guide to underinsurance that explains everything you need to know including what underinsurance is, how common it is an how to avoid it.
