"For specialist insurers and MGAs, the priority is to support brokers with clear underwriting guidance."
- Alison Williams - Prestige Underwriting
According to new research from Prestige Underwriting, 76% of brokers have identified either incorrect property valuations or a lack of awareness about reinstatement costs as the main driver of underinsurance in the non-standard market.
Together, these factors were cited more often than customers cutting cover to save money, which accounted for 24%.
54% of brokers said they believe underinsurance risk is rising as a consequence for non-standard household customers, with 35% believing it remains at a high level.
The property types most commonly identified by brokers as the most vulnerable to underinsurance were non-standard construction at 65%, listed or heritage homes at 56%, and unoccupied or probate properties, also at 56%.
Thatch properties and homes with subsidence history were also identified as areas of concern by 26% and 18% of brokers, respectively, while flood-exposed homes were cited by 15%.
These property types can require more detailed assessment because specialist materials, conservation requirements, access issues and the condition of the property can all affect the true cost of reinstatement.
The ABI/BCIS House Rebuilding Cost Index rose by 4.4% in the year to October 2026, while more recent ABI figures revealed that the average home insurance payout exceeded a record £10,000 in the third quarter of 2026.
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Prestige Underwriting says the findings highlight the need for insurers, MGAs and brokers to review how they establish and explain rebuild values at renewal, particularly for homes requiring specialist assessment.
"Underinsurance is a serious issue, but the research shows the causes are not limited to customers cutting cover because of cost pressures," Alison Williams, managing director at Prestige Underwriting, said.
"Taken together, incorrect property valuations and lack of awareness about reinstatement costs account for more than three-quarters of brokers’ responses. That makes accurate assessment and clear explanation of rebuild values central to tackling the problem.
"Brokers have an important role to play because they can ask the right questions, explain why rebuild values matter and guide customers towards appropriate cover. That should include checking how and when a rebuild estimate was obtained and whether changes to the property mean it needs reassessment.
"For specialist insurers and MGAs, the priority is to support brokers with clear underwriting guidance, access to underwriters and the expertise needed for more complex homes."
