With the ever-increasing rise of construction materials and labour costs continuing to rise, more and more businesses are finding the financial gap between rebuilding valuations and their insurance cover continues to widen, leaving a gap when it comes to make a claim. This is putting many social care businesses at risk.
A recent survey undertaken in 2023 by RebuildCostASSESSMENT which presents data from more than 29,000 build valuations showed that more than 9 out of every 10 buildings in the UK were currently insured for the wrong amount. The majority, 81% were underinsured and 14% were over-insured. (Source: RebuildCostASSESSMENT.)
The survey showed that the average buildings were insured for just 63% of what they should be. The same survey undertaken in 2021 showed that 68% were underinsured and in 2022, it stood at 66%, so the gap continues to grow.
Overall, residential buildings are 82% more likely to be underinsured, compared to 80% for commercial properties. Furthermore, residential buildings are on average only covered for 59% of their actual reinstatement value, compared to 66% for commercial properties.
Sports and recreation centres are the category of buildings most likely to be underinsured in the UK, followed by hospices, licensed premises and hotels, nursing/care homes and golf clubhouses.
While the worst of construction inflation may be over, it continues to be a significant factor, it is alarming that the rebuild cost gap has continued to grow.
What is particularly concerning is the type of properties that feature in the top 10 most likely to be underinsured’. Hospices, care homes and nursery schools all provide essential social care services and as the survey indicates are particularly at risk from underinsurance
It’s important that in the event of a fire, flood or any other type of insurable incident, all homes, businesses and vital facilities can return back to business as quickly as possible after an event.
At Pollensa we have negotiated Rebuild cost assessments for a number of our clients to protect their business and negotiated the cost as part of our new business or renewal strategy.
If you would like to hear more on how we could assist you and your business, please do not hesitate in contacting us on 01778 303111 or email enquiries@pollensa-insurance.co.uk
Thank you to RebuildCostASSESSMENT for their contribution to this article.
