Why stone-built houses could leave you underinsured, and what to do about it

When arranging home or landlord insurance, understanding your property's rebuild cost is crucial. However, recent claims data has identified an important issue that could leave some policyholders unknowingly underinsured – leaving them at risk of receiving less than expected if they make a claim.

Rebuild costs

Stone construction, alongside brick-built homes, is typically considered “standard” in insurance terms. However, stone houses can cost significantly more to rebuild – often up to 50% more than their brick counterparts. This can catch property owners out when taking out a home insurance policy, especially if the rebuild cost has been estimated using generalised tools or assumptions.

Why is stone construction a much higher rebuild cost?

Material cost: Stone is more expensive than brick or concrete and can be harder to source, especially if specific types or finishes are needed. Prices can also vary significantly between different types of stone, such as limestone, sandstone or flint.
Design complexity: Intricate designs, styles, and unique features will require more time to recreate, leading to higher costs.
Skilled labour: Stonework often requires specialist stonemasons, whose expertise comes at a premium.
Longer build times: Material lead times and the labour-intensive nature of stone construction can increase construction time, which pushes costs up.
Planning requirements: In some areas, especially those with listed buildings or within conservation zones, planning laws may require like-for-like rebuilds, adding further cost and complexity.
Location: Rebuild costs can vary depending on where you are geographically, as this can impact the availability of materials and skilled labour.

The risk of underinsurance

Underinsurance happens when the rebuild cost of a property is underestimated, and the sum insured doesn’t reflect the true cost of repair or total reconstruction. In the event of a significant claim – such as a fire or flood – this could mean a large shortfall between the payout you’ll receive from the insurer and the cost to rebuild your property.

For example, if your stone-built home should be insured for £600,000 but is only insured for £400,000 due to an underestimated rebuild cost, your insurer may only pay a proportion of any claim. This is known as the “average clause,” which could leave you paying tens of thousands out of your own pocket.

What do you need to do?

Here’s what owners of stone properties should do:

Understand that market value is not the same as rebuild cost
The sale price of your home is not the same as its rebuild cost. Always base your insurance on the estimated cost to rebuild the property from scratch, including demolition and professional fees.
Get a professional rebuild cost assessment
A chartered surveyor can provide an accurate rebuild valuation based on your specific property. This is the most reliable way to ensure you’re adequately insured. You can also use the BCIS Rebuild Cost Calculator for a guide (but as mentioned above, calculators like this may not be able to give an accurate rebuild cost for stone-built buildings).
Check your policy sum insured
After years of inflation and rising costs, if you haven’t reviewed your rebuild cost recently, there’s a chance you’re underinsured. You may need to increase your sum insured to reflect its current rebuild cost.

Stone-built homes’ unique construction means they come with unique considerations regarding insurance. Taking the time now to make sure your policy reflects the true rebuild cost could save you from an expensive mistake later on.

Need advice?

If you’re unsure whether your property is adequately insured, speak to our expert team.

Speak to us: 01603 649650