When insuring your property, most policies will require a ‘Sum Insured’ figure in order to adequately and accurately insure your property. As a landlord or homeowner, having the correct Building Sum Insured figure can be the difference between being correctly insured, or being under or over-insured. Without the right figure, you could be paying higher premiums than needed or worse, find that you aren’t adequately insured if you find yourself needing to make a claim for your property. The BSI (Building Sum Insured) is an important figure to get right, but what exactly is it and how do you calculate it correctly?
What Is Building Sum Insured?
BSI, or Building Sum Insured, is effectively the full rebuilding cost of the property. Most domestic properties will require this figure when applying for an insurance property in order to make sure that you are getting an adequate level of cover for the property itself.
The BSI is a carefully calculated figure that takes into account how much money would be required to rebuild your property if it were completely destroyed and will ultimately be the maximum amount that the insurer will pay out in the event of a claim. The BSI will usually be calculated to cover:
- The demolition and clearing of the damaged property
- The rebuilding of the property from top to bottom using its existing design but with modern materials and techniques
- The land surrounding your home and any outbuildings
- The above in relation to the following structures:
- Any tenant’s existing improvements
- Fixtures and fittings
- Walls
- Gates
- Fences
- Outbuildings such as annexes
- Gangways
- Extensions
- Roads, car parks, gardens, paving, and footpaths
- Security cameras and lights
- Piping, ducting, and cables
- Any fixed oil/fuel tanks including boiler systems
- All public mains wires, systems, and accessories
Taking into account the above, as well as any building regulations and other legislation, the BSI is a carefully calculated number that will determine the level of Landlord Building Insurance or Home Insurance that you will need.
Why Do I Need BSI?
You will need a BSI for any buildings insurance policy that you apply for, whether you’re a homeowner looking to insure your own property, or a landlord seeking to insure a property that you plan to let out to tenants. Your Sum Insured will provide the insurance provider with an accurate valuation of how much they will need to provide you with in order to rebuild the property in the case of complete destruction which will ultimately work in your favour by ensuring you are never left short. The sum given should be as accurate as possible in order to make sure you aren’t under or over-insured.
How Should I Calculate It?
Getting the Sum Insured correct is the responsibility of the person being insured, meaning that you have to take every step to make sure that your valuation is correct. There are two main ways to get a general figure for the Sum Insured, however the only real way to get the most accurate valuation is through a Chartered Surveyor.
Some online calculators can prove useful when in the initial stages of finding a home insurance quote or to give a rough estimate that you can provide to the surveyor as a starting point. For example, the Association of British Insurers’ website offers a calculator that can help you get a general estimate for the Sum Insured, or provide you with a quick way to check that your insurance policy is still covering the cost when you come to renew your policy.
The best and most accurate way to get a Sum Insured valuation, however, is by using a professional valuation company. This is particularly important if your house has any kind of unusual features, such as a thatched roof, or any tenant improvements such as additional conservatories, extensions etc. This is also the case for owners of historic or listed buildings, or landlords looking to insure an entire block of flats.
Do I Need A Professional Valuation?
While online calculators can be helpful for providing a rough estimate, we do advise that you opt for a professional valuation when finalising your insurance policies. Rebuild costs can vary drastically from house to house and there are a number of elements that can affect the overall BSI you’ll need. Flats, for example, can be more complicated to insure and are usually insured as a whole. Historic or listed buildings will require a like-for-like valuation which can make the cost much more expensive. A professional valuation will take all of this into account and can advise you on the most accurate BSI possible.
It’s also important to note that we can’t provide you with your BSI – you will need to contact a company that specialises in these valuations in order to get the most accurate number possible. You can use the RICS website to find an approved chartered surveyor to ensure you’re getting the best service possible.
For more information regarding the BSI and how we use it, or to get a quote for your Landlord Buildings Insurance or Home Insurance, feel free to get in touch with Ashburnham Insurance for help.