Current climate of concern to rebuilding costs
We are all aware of the headlines in the news about the shortages of Building Materials and Labour, in particular the impact this could have on the cost of a rebuilding claim.
Whether it be because of Brexit, Covid and people wanting more works done on their homes or HGV Driver Shortages – the cost of rebuilding has increased at a far higher rate than any inflationary provision since the beginning of the year.
We are therefore recommending to all our clients that sums insured are reviewed NOW before your renewal and importantly before any loss is sustained.
Historically, if your building has had a valuation for insurance purposes within the last 3 to 5 years – the annual index linking of the sums insured should have kept the building covered in line with current costings. However the exceptional circumstances at the moment would leave many of us underinsured.
We have spoken to loss adjusters to ascertain if rebuilding costs are likely to go down – the consensus is that they would plateau over the coming months/years – but not reduce back down to the levels seen in previous years.
For Commercial and Farm Buildings, the sums insured should be seeing an increase of 30-40% for modern materials. Residential and Traditional built buildings are also having similar substantial increases in costs and should be reviewed. There is also the impact of the longer lead times in getting materials for repairing and rebuilding – is your Business Interruption Indemnity Period long enough to handle this and the possible impact on your businesses income?
We would strongly advise that you carry out a review with your Land Agent or Surveyor, we are also more than happy to assist you and have access to qualified specialists.
Please do not hesitate to contact us to discuss.