Website warns of building insurance rip-off

An insurance price comparison site has warned consumers to make sure that their buildings are valued correctly when buying building insurance.

Insurance website insuresupermarket.com said that whilst property values had risen significantly in the last few years, the costs of building materials had not. The cost to rebuild a home is therefore significantly less than the cost to buy it.

The insurance website said that customers who have building insurance priced at the property value could find they are paying as much as £600 more than they could otherwise be.

Richard Mason, director of insuresupermarket.com, said: Whilst your property market value may be vastly higher than it was five years ago, the price of construction materials hasn't risen above inflation, so the rebuild cost of your home will likely be a lot lower than the price you'd sell it for.

Unless you've just bought your property, and read through your surveyor's report carefully, many homeowners have no idea of the rebuild cost of their home.

The company said that homeowners should check the external floor area, used to calculate the rebuild value of their home, by multiplying the length and width of their property from the outside.

If the upstairs is the same size and shape, the figure could be doubled, otherwise it should be measured separately.