The amount of buildings insurance you need must be sufficient to cover the cost of rebuilding your home.
An important point to note is that the cost of rebuilding your home is not the same as the price you would receive should you sell your property (the market price). It is generally lower and covers the cost of totally rebuilding the property. The amount covered should also include the cost for demolition, site clearance, builders and architects fees.
Assessing the cost correctly is important to avoid paying too much for unnecessary cover, or not having sufficient cover that leaves you with a hefty bill to cover any shortfall.
If you extend, rebuild or renovate your home it’s recommended that you review your buildings insurance policy to ensure sufficient cover is provided.