How much should your investment property be insured for?
Posted by markharrison on November 15, 2007
One of the most annoying things about insurance (I’m speaking as a property investor here) is that box that says “estimated rebuild cost.”
Now, I have a fairly astute idea of how much it would cost to re-carpet a room, re-paint a room, fit a new kitchen, add a conservatory or for that matter convert a loft into an extra bedroom (or two!) but re-building? I’ve never needed to do that.
Fortunately, to the rescue comes the BCIS, who have a “estimated rebuilding cost” calculator. It asks a few basic questions like “how many square feet is your house”, and “where in the country do you live”… and then comes up with an estimate.
Before you look, though, the following part of the RICS notes about it is important:
The guidance figures provided are based on specific examples of houses of average quality, built using standard construction methods. However they are not applicable to:
- properties built of stone or materials other than brick
- properties with more than two storeys or with basements and cellars
- houses with special design features, historic or listed buildings, or houses which are larger than the examples
- houses other than of average quality.
As an individual investor, of course, you seldom have to insure a flat – normally the management company (which admittedly, you might part-own) will do that, not the indivdual flat owner.
Obviously, if you actually needed work done, it may be worth hiring a proper surveyor, or even an architect, to give a specific estimate of the costs, but that’s probably overkill for finding out the one number to type into the insurance system.
You can find the calculator here