Navigating Rebuild Costs and Insurance Challenges for Listed Buildings Amid Material and Supply Chain Issues

Last Updated on: 13th March 2024, 05:14 pm

For homeowners, ensuring the “building sum insured” reflects true rebuild costs is fundamental, a task that becomes even more critical for those insuring listed buildings. Recent trends and analytics underscore the gravity of this issue.

The Department of Business & Trade’s recent report on building materials might initially seem positive with a noted 2.3 per cent dip in the “all works” category prices compared to the previous year¹. However, a deeper dive into the data reveals concerning trends for listed building restorations, such as rising costs for key materials like cement and decreased production and supply levels relative to 2023, all of which are crucial in setting the right building sum insured.

Underestimating rebuild costs due to speculation or inaccurate estimates can lead to underinsurance, jeopardising claims payouts in case of significant damage, a risk many overlook with the mindset of “It will never happen to me”.

Living in a listed property often means embracing its historical significance and unique aspects rather than anticipating a complete rebuild. Yet, when embarking on major approved restorations, it’s essential to ensure that the insurance policy comprehensively covers the specific materials and techniques required, as indicated in the recent report.

For those faced with the daunting task of rebuilding a listed property due to irreparable damage, securing adequate insurance coverage in advance is critical.

The distinct nature of listed properties demands careful consideration of the materials and skilled craftsmen involved in the restoration, underlining the necessity of accurately setting the “building sum insured” to cover potential material cost increases and supply chain delays.

With over 20 years specialising in listed properties, Abode Insurance offers invaluable advice on ensuring complete readiness and protection against all eventualities, including shifts in the building materials market.

Understanding the difference between the market value of a property and the appropriate insured amount is crucial. Steve Hook, Divisional Director at Abode, highlights the significance of this distinction: “This has to be the single biggest issue for household insurance today. The cost you paid for your home (this year or ten years ago) isn’t the same as the sum you insure it for. Guess at the cost to put it back together and I’ve absolutely no doubt you’ll get it badly wrong.

Listed properties pose additional challenges due to the typically higher costs of specialised materials and skilled labour.

Hook’s recommendation is to consult a specialist broker to ensure your home insurance sufficiently protects your listed building.

For questions or concerns about your current insurance, especially the buildings sum insured, contact Abode’s specialist team at info@abode-insurance.com or call 01622 476433.

¹ Monthly Statistics of Building Materials and Components September 2023 (publishing.service.gov.uk)

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