Buildings and contents home insurance

Getting the sums insured right

A cheap premium is worthless if the sum insured is too low. This is where most households quietly lose money, because insurers can apply a rule called average that scales any payout down to match how under-insured you were.

Buildings: rebuild cost, not market value

Your buildings sum insured should reflect what it would cost to rebuild your home from the ground up — demolition, clearing the site, materials, labour, professional fees and VAT — not what the property would sell for. The two figures are very different: in many areas the market value is well above the rebuild cost, but in others (older or larger homes) rebuild can exceed it. The industry benchmark is the BCIS residential rebuild index, which put average rebuild costs at roughly £1,700 per square metre in 2026, within a broad range of about £1,500 to £2,500 per square metre depending on location and construction. The ABI and RICS both provide free BCIS-based calculators; for anything unusual — thatched roofs, listed status, non-standard construction — a professional reinstatement valuation is worth the cost.

Contents: add it up room by room

Contents cover should equal the cost of replacing everything you own on a new-for-old basis. Walk through each room and total furniture, electronics, appliances, clothing, kitchenware and soft furnishings; most people underestimate by thousands. Watch the single-article limit — typically £1,500 to £2,000 — above which items such as engagement rings, watches, laptops, bikes and art must be specified individually or they will not be paid in full. If you want cover for accidental damage (a foot through a TV, red wine on a carpet) or for possessions away from home, those are usually optional add-ons.

Why underinsurance bites

Suppose your home should be insured to rebuild for £400,000 but the policy says £300,000. You are 25% under-insured, so an insurer applying average can cut a £40,000 storm-damage claim to around £30,000, leaving you to find the rest. With UK insurers paying out a record £6.1 billion in property claims in 2025 — and the average household claim hitting £6,340 in early 2026 — the gap between being correctly insured and cutting corners has rarely mattered more.

Renting rather than owning? You only need contents cover. Worried about ground movement in particular? See our guide to insuring a house with a subsidence history.