9 out of every 10 Commercial buildings in the UK are currently insured for the wrong amount

RebuildCostASSESSMENT.com’s latest annual rebuild cost infographic, which presents data from more than 29,000 recent rebuild valuations, shows that more than 9 out of every 10 buildings in the UK are currently insured for the wrong amount. The majority, 81%, are underinsured, while 14% are overinsured.

On average, buildings are covered for just 63% of what they should be. The equivalent figure last year was 66%, and in 2021 was 68%, meaning the gap between rebuilding costs and sums insured continues to increase. 

Overinsured buildings were on average covered for 122% of their true reinstatement value, down from 133% in 2022.

Categories of building

For the first time this year, RebuildCostASSESSMENT.com’s infographic has highlighted which kinds of building in the UK are most exposed to underinsurance.  

Overall, residential buildings are slightly more likely to be underinsured – 82% compared to 80% for commercial properties. Also, residential buildings are on average only covered for 59% of their true reinstatement value, compared to 66% for commercial. 

Sports and recreation centres are the category of buildings most likely to be underinsured in the UK, followed by hospices, licensed premises and hotels, nursing/care homes and golf clubhouses. 

‘Interesting findings’

RebuildCostASSESSMENT.com’s Ewan Sandison, said: “While the worst of construction inflation may be over, it remains a significant factor. It’s no real surprise that the rebuild cost gap has continued to grow. There’s still a lot of work to be done to help people insure their buildings for the right amount. “What is particularly concerning is the type of properties that feature in our ‘top ten most likely to be underinsured’. Hospices, care homes and nursery schools all provide essential social care services and as we can see are particularly at risk from underinsurance.” Ewan added: “We need to ensure that in the event of a fire, flood or any other kind of insurable incident, all homes, businesses and vital facilities can bounce back quickly and achieve a positive outcome. Underinsurance remains a significant issue.”

RebuildCostASSESSMENT.com is the UK’s insurance valuations market leader. Let’s tackle underinsurance together. To find our more, visit www.rebuildcostassessment.com today.