A Simple Step by Step Guide to Calculating Home Rebuilding Costs

A Simple Step-by-Step Guide to Calculating Rebuild Costs

Home insurance is designed to protect you when the unexpected happens. If you experience a storm, fire, theft, or accident, your policy can really help soften the blow.

But its most important role, is to help you get back to where you were, before disaster struck. In the worst-case scenario, this could involve rebuilding your home — after events like a flood, subsidence, or fire. And that happens more often than you might think. In fact, in Ireland, around 4,000 domestic fires are reported every year.

But what happens if your home insurance doesn’t cover the full cost of rebuilding your home? Then, you could find yourself and your family in a tough financial situation.

Underinsurance is an increasingly common problem, affecting one in five policy holders. If you want to avoid this risk, make sure your home insurance policy includes an accurate and current rebuild cost. The good news is that calculating this figure is much easier than you might think.

In this article, we’ll explain what underinsurance means, outline three simple steps to estimate your rebuild cost, and show you how to keep your policy up to date.

What does underinsurance mean?

It may not come as a surprise to learn that building costs have risen sharply in recent years. A combination of global instability, labour shortages, and rising material prices have pushed up construction costs by almost 25% from 2019 to 2023 alone.

Home improvements can also increase the price of rebuilding a property. If you’ve added an extension, upgraded your windows, or built an attic conversion since taking out your policy, you’ll probably need to increase the rebuild amount stated.

So, what does this mean for you? Let’s look at this example of how underinsurance might work in practice:

you have insured your property for €400,000
but the rebuild cost of the property is €500,000
This means that your property is underinsured by €100,000
Therefore, you are only insured for €400,000 (80%) of the rebuild cost in the event of a total loss of your home and you may be left to pay the remaining €100,000 (20%) of the cost

Underinsurance is a serious problem that means less money when you need it most.

The best way to avoid this? Update your policy today with an accurate rebuild cost by following these three simple steps.

Step 1: Get a current rebuild cost estimate

Many people think that they need to enter the current market value of their house on their policy. This is incorrect: the rebuild cost and market value are very different things. For example, your neighbour’s house could sell for €300,000, but your house could still cost €400,000 to rebuild.

The Society of Chartered Surveyors Ireland (SCSI) offers a very handy calculator that can help you estimate the current cost of rebuilding your house.

You’ll need to enter:

Details of your house type
Your home’s measurements (they have instructions to help you do this)
Where your home is located

It’s important to bear in mind that this calculator, while useful, is only a general tool based on the type of property you might find in any of the housing estates in Ireland. It can give you a good indication of how much it would cost to rebuild your home, but it’s based on averages, rather than specifics.

Step 2: Factor in extra details

It goes without saying that, should the worst happen, you’ll want to replace or reinstate your house to the same standard. That means your rebuild cost should include what makes it special, from luxury flooring to a bespoke-built kitchen.

The SCSI calculator offers space to add extra costs if you have an outbuilding, garage, or a particularly high finish in your home. But if you have a one-off home or a period property, you will need to get expert advice in order to put together an accurate rebuild cost — a qualified quantity surveyor should be able to help.

Don’t forget about contents too: check that the figure on your policy covers the cost of repairing or replacing personal belongings and household goods such as carpets, rugs, furniture, computers, and televisions.

Our home insurance team has put together a handy contents checklist to help you estimate this figure correctly.

Step 3: Update your policy

The next step in the process is to update your policy with the correct rebuild cost — something you’ll need to do regularly, particularly if you make home improvements.

When you increase your rebuild cost, it may result in a rise in your premium, but you will also have the peace of mind of knowing you and your family are fully protected with no surprises and no shortfalls.

At RedClick, we don’t just offer affordable home insurance we provide extra comforts too, in the form of benefits like Emergency Home Repair for buildings and contents insurance.

As you can see, calculating an up to date rebuild cost is quite straightforward — with very little maths or measurements involved. If you’d like to speak to a member of our team about the process, just call 015534040 or chat to us on Live Chat online. We have more than 400 employees in Ireland who make sure our insurance “clicks” — for you, your family, and your home.

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