Could you be underinsured? Why your rebuild cost matters

Many homeowners may not know whether their buildings insurance would fully cover the cost of rebuilding their property if the worst happened.

A recent Which? survey of 1,205 homeowners in our Connect panel found that one in three did not know their home’s rebuild cost, while nearly one in five had never checked or updated it.  

Here Which? explains why rebuild cost matters, when to review it, and how to check whether your home is properly insured.

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What is rebuild cost and why does it matter?

Most homeowners have a rough idea of what their property might sell for – but rebuild cost is different. It’s the amount it would take to rebuild your home from scratch if it were destroyed, including labour and materials.

Buildings insurance is based on this rebuild cost, not the market value. If the figure on your policy is too low, you could be underinsured, meaning your insurer may reduce any payout if you need to claim. If it's too high, you could be paying for more cover than you need.

Even among homeowners who said they knew their rebuild cost, only 55% in our survey were confident the figure was accurate. Meanwhile, 17% said they did not know or could not remember how the figure on their policy had been calculated. 

• Find out more: best home insurance companies in the UK 2026.

When should you check your rebuild cost?

Only 45% of homeowners in our survey said they had checked or updated their rebuild cost within the past two years. 

A further 18% said they had never reviewed their rebuild cost, meaning the figure on their policy may no longer reflect what it would cost to rebuild their home today.

Rebuild costs can change over time, particularly as labour and material costs rise. Government figures show the construction material price index for ‘All Work’ was 2.1% higher in February 2026 than a year earlier, while the index for new housing was up 3.4%.

You should check your rebuild cost at renewal, particularly if the figure has not changed for years. It's also worth reviewing it after major changes to your property, such as an extension, loft conversion, structural work or major renovation.

• Find out more: check our guides to the best buildings insurance or best contents insurance.

Can you rely on the rebuild cost on your policy?

A rebuild cost appearing on your policy does not necessarily mean your home has been professionally assessed.

In our survey, 43% of homeowners said the rebuild cost currently listed on their policy had been provided by their insurer. But in some cases, the figure may reflect a standard policy limit, a default assumption, or information entered into a calculator.

Another 16% said they calculated their rebuild cost using an online tool, while 9% said they had estimated or guessed it themselves. A further 15% did not know or could not remember how the figure had been obtained. Just 5% said their rebuild cost had been assessed by a surveyor or valuation expert.

Some responses suggested confusion between rebuild cost and policy limits, with homeowners referring to unlimited cover, £1m limits or maximum sums insured rather than a rebuild figure.

This matters because a high policy limit is not the same as knowing your rebuild cost. If your home is older, listed, unusually built, extensively altered or difficult to compare with typical properties, it may be worth getting a professional valuation rather than relying on a rough estimate.

‘Don’t confuse rebuild cost with market value’

Dean Sobers, Which? insurance expert, says:  

‘It’s easy to confuse a property’s rebuild cost with its market value – but they’re quite different. 

'Both change over time. The latter reflects how much you could sell your home for, whereas the former (incorporating factors such as materials and labour costs) reflects how much it would cost to rebuild. 

'The rebuild figure is fundamental in how insurers calculate premiums. If the estimate’s off, it could mean you’re overpaying or – arguably worse – underinsured. If you’re asked to provide or check a rebuild cost estimate, it’s worth sense checking it using a rebuild cost calculator. 

'There are several free ones online – including one on the Association of British Insurers' website. But for real accuracy, you’ll need to contact a surveyor. You can find these via the Royal Institution of Chartered Surveyors.’

• Find out more: how to find cheap home insurance.

How to check if your home is properly insured

Here’s how to check whether your cover is likely to be enough:

1. Check how your buildings cover is set up: your policy may be based on a specific buildings sum insured, a high standard limit, bedroom-rated cover, or unlimited cover.
2. Ask what figure or assumption your policy is based on: if your documents are unclear, ask your insurer what rebuild cost, limit or assumption has been used.
3. Use a rebuild cost calculator: use the Association of British Insurers' calculator. Online tools can be useful, but they rely on the information you enter, so make sure the details are accurate.
4. Consider a professional valuation for unusual homes: a surveyor or valuation expert may be more appropriate if your home is listed, unusually built, made from non-standard materials, extensively altered or difficult to compare with typical properties.
5. Tell your insurer when your property changes: update your insurer after major building work, or if the rebuild figure looks wrong at renewal.