Buildings and Contents Insurance: How to Get the Sum Insured Right
- conor2585
- 2 days ago
- 3 min read
When it comes to protecting your home, home insurance is essential — but simply having a policy in place is not enough. Insuring your home for the correct amount is crucial to avoid costly deductions when making an insurance claim.
Increasingly, we see homeowners and business owners underinsuring their Buildings and Contents, often without realising the consequences. Underinsurance can cause serious problems when you need to make a claim on your home insurance policy. If your property is insured for less than the true rebuilding cost, insurers will apply average (underinsurance). This means they will make a proportional deduction from your claim settlement, regardless of the size of the claim. For example, if your home is 20% underinsured, your insurer can legally reduce your claim payout by 20%, even if the claim amount is well below your total sum insured.
Buildings Insurance – Getting the Sum Insured Right
When calculating the correct level of buildings insurance, insurers rely on the Chartered Surveyors of Ireland (SCSI) rebuilding rates. These rates are used to estimate the cost to rebuild your home from the ground up following a total loss.
It’s important not to confuse the rebuilding cost of your home with its market or sale value. The rebuilding cost reflects construction costs, professional fees, and demolition, not what your property would sell for on the open market.
Below are the current rebuilding rates per square metre used by insurers as a guide when calculating buildings insurance sums insured.
You can also calculate your home’s rebuilding cost using the rebuilding cost calculator provided by the Chartered Surveyors of Ireland (SCSI), which is available on their website. This calculator is widely used across the insurance industry and provides a reliable guide when setting your buildings insurance sum insured.
When using a rebuilding calculator, it’s important to allow for additional structures and features such as driveways, boundary walls, garages and outbuildings, as these are often overlooked but form part of the overall rebuilding cost.
What Insurers Mean by “Buildings” or “Premises”
Under a standard home insurance policy, the definition of Premises generally includes the following:
The private house itself, including its fixtures and fittings. The property must be constructed of brick, stone or concrete and roofed (at least 70%) with slates, tiles, concrete, asphalt or metal.
Domestic outbuildings located within the boundaries of the insured property, provided they are used solely for private domestic purposes and have never been used for commercial or business use. These typically include garages, garden sheds, boiler houses and greenhouses.
Fixtures, fittings and external structures within the boundary of the premises, including solar panels, air-to-water heat pumps, swimming pools and hot tubs, tennis courts, fuel storage tanks and their contents, wind turbines and polytunnels (subject to individual policy limits), septic tanks, terraces, patios, decking, driveways, footpaths, walls, gates and fences, as well as fixed fountains and water features.
Ensuring all of these elements are included when calculating your rebuilding cost helps avoid underinsurance and reduces the risk of deductions being applied to your claim settlement.
Contents Insurance – Making Sure You’re Fully Covered
To correctly insure your contents on a home insurance policy, you should calculate the total cost of replacing all your belongings as new, rather than what you originally paid or their second-hand value. Contents insurance is designed to cover the cost of replacement, not depreciation.
This includes furniture, clothing, electronics, kitchen items, carpets, curtains and personal belongings throughout your home. It’s also essential to identify high-value items such as jewellery, watches, artwork and collectibles. These items are often subject to a single article limit under most policies and may need to be specified separately to ensure they are fully insured.
A practical way to avoid underinsurance is to go room by room, carefully listing your belongings and reviewing your policy limits. Taking the time to do this helps ensure you are properly covered and reduces the risk of being left out of pocket if you need to make a claim following an incident such as a fire, flood or theft.
If you’re facing an insurance claim and want clear, expert support from start to finish, a quick call to Bedford Loss Assessors could make all the difference. We’re here to protect your interests, handle the insurer, and help you get the settlement you deserve — so you can focus on getting back to normal as quickly as possible.
Conor Bedford
B.Eng, CIP
m: 086-4561679
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