Why your home is probably underinsured and how to fix it.

February 26, 2024

Your home is probably underinsured. That’s a bold statement, we know.

But here’s the thing. We’ve been helping high-net-worth individuals to insure their high-value homes and contents for over 30 years and we’ve insured some incredible homes along the way.

And although your home, second home and holiday homes are completely unique, we’ve noticed a worrying and recent trend for underinsured homes and contents.

This article explains the two main areas of underinsurance, why it’s happening and what you can do to fix it.


Underinsurance problem one: your home isn’t insured for its true rebuild value

Most standard homes are insured based on a bedroom-rating (the number of bedrooms you have  =  the sum to insure). But to make quoting simpler, many insurers have implemented a blanket rebuild value of up to one £1 million on a standard home insurance policy.

The problem is, post-Covid, building costs have gone up so much that a £900k rebuild is now probably closer to £1.3 or £1.4million. Which, on a standard home insurance policy, would be underinsured.

And to complicate things further, your insurer isn’t responsible for working out your rebuild costs. You are.


My house was valued when I bought it so my insurance must be correct, right?

When you bought your house, you probably had some sort of survey done:

  • A drive-by valuation
  • A quick internal / external inspection
  • An enhanced survey carried out by a building surveyor (where they pulled up floor boards and got down and dirty with your drains).

The enhanced survey is the only one that gives you a building value. But the ‘bricks calculator’ that chartered surveyors use, provides such a broad estimate that even an enhanced survey doesn’t provide an accurate rebuild cost.

In our experience, if you have a high-value home (anything valued at over £1,000,000) and you only have standard home insurance, your home could be underinsured.


Why does it matter if my home is underinsured?

In the 20 years that our Client Director Carl Sharp has been working at Macbeth, he’s never seen a claim for a ‘total loss’ i.e. a full rebuild. And yes it’s true that a complete rebuild (due to a destructive fire or a plane crashing into your house) is very rare.

But, you are legally required to insure your home in its entirety and for its true rebuild cost. And if your home is underinsured and you need to make a claim for significant damage, your insurer is likely to send round a loss adjustor. If the loss adjustor finds that your home is underinsured (even if you’re not claiming for a full rebuild), your insurers would be within their rights to apply an average and you might only receive 50% of your claim.

“If you have a high-value home and you only have standard home insurance, you could be underinsured. If you think your rebuild costs are anywhere close to £1 million (or were just shy of it in the past), it’s well worth getting a rebuild survey to confirm. Being underinsured is simply not worth the risk.”

Carl Sharp, High-Value Home and Contents Specialist


Top Tip: Consider everything that isn’t your house but is still included in your property

Buildings insurance or home insurance isn’t just for your house. Rebuild costs need to take into account your property in its entirety, so be sure to include things like driveways, swimming pools, stables, tennis courts and outbuildings in your rebuild costs.


I’m worried I’m underinsured, how do I fix it?

The good news is, working out if you’re underinsured is easy to fix. You just need to get a rebuild valuation survey and let your insurers know the rebuild cost. There are three ways to get a rebuild survey done:

  • Get an independent online valuation.

This is the cheapest of the three options and a survey from will cost around £150. These surveys can also be used for commercial property insurance.

  • Ask a local surveyor for a full rebuild survey.

This can cost anywhere between £500 and £800.

  • Contact us to organise an online rebuild survey for you.

We don’t earn anything from arranging your survey for you, but we do get peace of mind that we’ve done absolutely everything we can to make sure you’re not underinsured.

And the best bit? Once you’ve had a rebuild survey completed and the rebuild cost has been agreed, many High Net Worth insurers will offer something called ‘extended replacement’ which is like an unlimited rebuilding guarantee. So even if the cost of your rebuild goes up, you’re covered.

Now for the second reason you might be underinsured…


Underinsurance problem two: You have hugely underestimated the value of your contents

If you have expensive jewellery, fine art or antiques, you’ve probably got a good idea how much they’re all worth. You might even get these precious items valued every few years to check their worth.

But, often when we ask clients how much the rest of their contents are worth, it’s amazing how many people will err on the side of a lower valuation.

In our experience, that’s because it’s hard to mentally calculate a value for so many different types of items that are dotted around your home. Items that are commonly undervalued or missed are; clothes, handbags, tools and wine collections.


How to fix it?

Imagine your house as a handbag; if you turned it upside down, anything that falls out should be included in your overall contents value:

Here are some tips for calculating accurate contents:

  • Keep an inventory for each room
  • Take photos of valuable items
  • Keep hold of invoices and receipts and send a copy of everything to your insurer
  • Don’t forget to value things like wine collections and new jewellery

A good, experienced broker should always gently challenge you about underinsurance (even if it’s not always something you want to hear).

“If a prospective client has a six-bedroom home but thinks they’ve only got contents worth £40k, we know instinctively that they’re probably underestimating the value of their contents.”

Carl Sharp, High-Value Home and Contents Specialist.


We feel so strongly about underinsurance that we’ll walk away if we think a client is undervaluing their home or contents. Because if you ever need to make a claim, it’s simply not worth being underinsured.



Worried about being underinsured?

Chat to Carl, Nicola, Rachael or Mandy to talk high-value home insurance and reassurance

Find out more about our High Value Home and Contents Insurance

Worried your home or contents might be underinsured?

Call us on 0118 916 5480

Worried your home or contents might be underinsured?

Call us on 0118 916 5480

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