A rise in property insurance premiums in the third quarter of this year has been linked to more widespread adoption of rebuild cost assessments. An increase in property premiums of 7.6% in Q3 was reported by the Acturis Premium Index.
Commenting in Insurance Age, Rob Marshall, Divisional Director for Enterprise at James Hallam said premiums were rising in part because "brokers had become better at utilising digital surveys to assess property values." He added: "There's an awareness that 80% of commercial properties are underinsured, and that is being corrected now.”
This shift aligns with the findings of RebuildCostASSESSMENT.com’s 2024 infographic, which reveals that while underinsurance levels in the UK have fallen from a record 83% in 2022 to 76% this year, they remain alarmingly high.
The role of rebuild cost assessments
RebuildCostASSESSMENT.com has been instrumental in correcting these discrepancies, having adjusted sums insured worth £85 billion in the past year. Ewan Sandison, Account Manager, commented, “These rises don’t come as a surprise. We’ve seen first-hand how accurate rebuild cost assessments can impact premiums. It’s good to see the industry supporting customers to get their sums insured right, as this is crucial in the event of a claim.”
These adjustments not only reflect better alignment with real-world rebuild costs but also highlight the importance of securing appropriate coverage to avoid financial and emotional distress during claims.
Addressing the wider underinsurance issue
Despite the progress, the fact that over three-quarters of buildings in the UK are underinsured remains a concern. RebuildCostASSESSMENT.com’s latest findings emphasise the need for continued efforts to tackle this issue. Ewan Sandison added, “On every high street or industrial estate, between seven and eight out of ten properties are underinsured. While valuations are helping, there’s still significant work to do.”
What can be done?
For property owners, brokers, and insurers, these trends underscore the value of regular and accurate rebuild cost assessments. To learn more about the current state of underinsurance, view our 2024 infographic here.