The disparity between the actual cost to rebuild properties and their insured value is expanding, putting many crucial social care facilities in jeopardy.
A recent infographic from RebuildCostASSESSMENT.com (see below), based on data from over 29,000 rebuild valuations, reveals a concerning trend:
91% of UK buildings are not insured for the correct amount.
A staggering 81% of these are underinsured.
Only 14% are overinsured.
The numbers are alarming. On average, properties are insured for merely 63% of their actual rebuild cost. This is a decline from 66% the previous year and 68% in 2021. The gap between the true rebuilding costs and insured amounts is evidently growing.
For those buildings that are overinsured, they're covered for 122% of their actual value, a decrease from 133% in 2022.
This year, the infographic also shed light on which types of buildings are most vulnerable to underinsurance:
Residential buildings are slightly more at risk, with 82% underinsured compared to 80% for commercial properties.
Sports and recreation centres top the list of most underinsured, followed closely by hospices, licensed venues, hotels, nursing homes, and golf clubhouses.
Ewan Sandison of RebuildCostASSESSMENT.com commented on the findings, emphasizing the ongoing challenges posed by construction inflation. He expressed particular concern over essential social care facilities like hospices, care homes, and nursery schools, which are among the top ten most likely to be underinsured.
Ewan stressed the importance of adequate insurance, stating, "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."
Takeaway for property owners
Ensure your properties are adequately insured. With the widening gap in insurance coverage, it's essential to regularly review and adjust your policies to reflect the true value of your assets. Protecting your investments today can save significant costs and heartache in the future.
A copy of their latest infographic can be downloaded below.