"Some people may worry that alerting their insurers to the higher rebuild cost of their property will increase their insurance premium, but this rise will be negligible and is a worthy investment in comparison to the shortfall in coverage should the property be damaged."
- Robert Lewis, corporate broking director at Towergate Insurance Brokers
On average, properties are covered for only 66% of the rebuild costs according to the latest cohort of Rebuild Cost Assessments. Given the current socio-economic climate, Towergate Insurance Brokers believes businesses and homeowners may be unable to fund the deficit, putting these individuals under financial strain. Consequently, the brokerage is warning businesses in the UK struggling financially not to cut back on insurance as they may not survive the consequences of being underinsured.
Discussing the importance of insurance for property owners, Robert Lewis, corporate broking director at Towergate Insurance Brokers said that “when agreeing on an insurance amount, [property] owners should be looking at how much it would cost to entirely rebuild including adequate provision for debris removal and professional fees.”
“When businesses are underinsuring their commercial properties, they aren’t covering the entire cost and can be left with a significant shortfall, especially after a recent spike in construction costs,” he explained.
Energy costs have already had a major impact on production costs, but Lewis noted that there is also a “huge demand for building materials and ongoing supply chain issues.” He felt that while people might be aware of this, they may not realise the impact it’s having on their insurance.
“Some people may worry that alerting their insurers to the higher rebuild cost of their property will increase their insurance premium, but this rise will be negligible and is a worthy investment in comparison to the shortfall in coverage should the property be damaged.
“Up-to-date valuation is key to ensuring that you aren’t left out of pocket following property damage, especially during the current crisis,” he concluded.
