If you own a property, there’s an issue that could potentially leave you seriously out of pocket: underinsurance. While it’s not new, recent inflation has made it a much bigger problem — and many property owners aren’t aware of just how far their insurance has fallen behind today’s rebuilding costs.

At its core, underinsurance means your property is not insured for the full amount it would cost to rebuild it. If disaster strikes — fire, flood, storm damage — and your cover is too low, your payout might fall short by tens or even hundreds of thousands of pounds.

Recent data shows that building sums insured (the amount your policy covers for rebuilding) may need to rise by up to 82% just to catch up with current costs.

How Did This Happen?

Back in 2022, research showed that 80% of UK buildings were underinsured, with sums insured averaging just 68% of the actual rebuilding cost.

Since then, inflation has pushed up the cost of materials, labour, and construction services by 25–35%. So if your property was already undervalued in your policy, the gap has now widened dramatically.

• To bring it up to the right level today, your cover may need to increase by 85% to 98%.
• Even properties that were correctly insured a few years ago may now be significantly behind.

What’s at Risk?

If your building is underinsured and you need to make a claim, the payout may be reduced — potentially leaving you to cover the shortfall. This is especially important in total loss situations, like a fire or structural collapse, where full rebuilding is required.

But even in partial claims, “average clauses” used by insurers can mean any payout is scaled down in line with the level of underinsurance. So being even 20–30% underinsured can result in a much larger financial gap when it matters most.

What Can You Do?

The good news: there are simple steps you can take now to make sure you’re adequately insured.

Review your current sum insured

Don’t assume your existing cover is accurate. Many policies are based on outdated estimates or market values (which are not the same as rebuild costs).

Get a professional rebuild cost assessment

A rebuild cost assessment calculates what it would cost to rebuild your property from the ground up — materials, labour, debris removal, and more — based on today’s prices.

Talk to an Insurance Broker

Share your concerns – speak to an insurance broker who will conduct a full review of your current policy and at Mayfair Insurance Brokers, we work with RebuildCostAssessment.co.uk to provide more accurate sums insured

Why Act Now?

Correcting underinsurance isn’t just a technical detail — it’s about safeguarding your home or business from financial disaster.

Insurance is meant to give peace of mind. But for that to happen, it needs to reflect reality. Now is the time to review your policy, check your sums insured, and take action — before you find out the hard way that your cover isn’t enough.

Need help reviewing your property insurance?

We can connect you with a trusted rebuild cost assessment service or talk you through your policy. Don’t wait until a claim to find out you’re underinsured — let’s make sure you’re protected today. Get in touch with our team today for a no-obligation quote.