Insuresupermarket.com is warning homeowners to make sure they are insured for their property rebuild costs rather than property market value.
With property prices holding on at comparatively high levels across the UK, homeowners who arent purchasing buildings cover at the right level, could be paying well over the odds for too much cover.
Richard Mason, director of insuresupermarket.com, says: “Just because the market value of property has soared through the roof in recent years doesnt mean buildings insurance cover need do the same.
“Buildings insurance premiums are calculated on the basis of the property rebuild cost, not the property market value and the two very rarely marry up, particularly in areas where property prices have ballooned.
“Whilst the property market value may be vastly higher than it was five years ago, the price of construction materials hasnt risen above inflation, so the rebuild cost of a home will likely be a lot lower than the price it would sell for.”
Mason adds: “Unless people have just bought their property, and read through the surveyors report carefully, many homeowners have no idea of the rebuild cost of their home.
“Its an easy mistake to assume the rebuild cost and market value will be the same, but this could cost you more than 600 in unnecessary buildings insurance premiums and thats just over the course of one year.”