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Buildings insurance · rebuild cost

Insure the rebuild, not the price tag

Buildings insurance pays to repair or rebuild your home. Getting the sum insured right matters more than anything else on the policy, and rebuild costs have been rising by around 4% a year.

Updated 6 October 2026 · Figures sourced and linked
Check your sum insured →BCIS calculator ↗
£309Average buildings-only premium paid, Q2 2026Source: Association of British Insurers, 3 August 2026
4.3%Annual rise in the House Rebuilding Cost Index, August 2026Source: BCIS for the ABI, August 2026 reading
£20kRecord average subsidence claim, Q2 2026Source: Association of British Insurers, 3 August 2026
£312mPaid on domestic flood claims in 2025, up 38%Source: Association of British Insurers, 17 February 2026

What it covers

The structure and everything fixed to it

Buildings insurance protects against the cost of repairing or rebuilding your home if it's damaged or destroyed. The ABI's buildings insurance guide lists what that means in practice:

  • repairing the structure, including plasterwork and flooring
  • replacing fitted kitchens and bathroom suites
  • drying out or decontaminating the property
  • alternative accommodation while your home is uninhabitable
  • rebuilding the whole property if it is destroyed

The usual causes are fire, storm, flood, escape of water, subsidence, theft damage and impact. Policies differ on garages, sheds, walls, gates and accidental damage, so check before you buy.

Tell your insurer about changes. The ABI's example: if you said the roof was in good repair and tiles were already loose, an undisclosed risk could invalidate a storm claim.

Buildings vs contents: who pays for what
ItemBuildingsContents
Roof, walls, windows, floors✓
Fitted kitchen and bathroom suite✓
Built-in wardrobes, fixed flooring✓
Pipes, cables, drains you own✓
Freestanding appliances✓
Furniture, rugs, curtains✓
Clothes, gadgets, jewellery✓
Alternative accommodation✓Often ✓

A simple test from the ABI: contents is anything you'd take with you if you moved. Fixtures stay with the building. Exact definitions vary by policy.

Rebuild cost checker

Has your cover kept up with rebuild costs?

Your sum insured is the most the insurer will pay. The ABI says it should be the rebuilding cost, not what you paid or the market value. Rebuild cost covers demolition, site clearance, materials, labour and professional fees.

If you set the figure years ago and your policy isn't index-linked, inflation can leave you short. Enter your sum insured to see how far, and what an average clause could do to a claim.

Rebuild cost may have outgrown your cover by£45,854Estimated rebuild cost today: £295,854
Your cover as a share of rebuild cost85%
If an average clause applies
£16,900
paid on a £20,000 claim
You'd cover yourself
£3,100
before any excess

Assumes rebuild costs rose by the same rate every year. The default is the latest annual change in the ABI/BCIS House Rebuilding Cost Index (4.3% to August 2026); the default claim is the ABI's record average subsidence claim for Q2 2026. Average clauses work differently by insurer and many policies index your sum insured automatically, so check your wording. For a real figure use the BCIS rebuild calculator or a chartered surveyor.

Rebuild inflation

Around 4% a year, every month of 2026

The ABI/BCIS House Rebuilding Cost Index tracks what it costs to rebuild a typical home. Its annual change has stayed between 3.5% and 4.3% throughout 2026, reaching 4.3% in August.

BCIS's own rebuild cost models, which power the free calculator, rose an average 3.8% for houses and flats in the year to January 2025, with plumbing up over 6% and lower-end kitchens up over 7.5%.

Many policies index-link the buildings sum insured each year. Indexing only moves the figure you started with, though: if that was wrong, it stays wrong. Re-check with the BCIS calculator after an extension, loft conversion or major renovation.

Jan 20263.7%
Feb 20263.9%
Mar 20263.8%
Apr 20263.5%
May 20264.0%
Jun 20264.1%
Jul 20263.9%
Aug 20264.3%

Annual % change in the House Rebuilding Cost Index. Source: BCIS for the ABI.

Subsidence

Record claims after a record spring

Insurers paid £72 million on domestic subsidence claims between April and June 2026, with the average claim at a record £20,000, after the warmest spring on record in England and Wales (ABI). Across 2025 subsidence payouts hit £307 million, the highest on record (ABI annual claims).

Dry clay soil shrinks, and trees draw more water from it. The ABI's warning signs:

Cracks that appear suddenly

rather than slowly through normal wear and tear

Cracks wider than 3mm

about the thickness of a £1 coin

Diagonal cracks

especially if wider at the top than the bottom

Cracks inside and out

in the same place, which can point to a deeper problem

Sticking doors and windows

that suddenly become hard to open or close

Rippling wallpaper

that wrinkles or tears with no obvious cause

Source: ABI subsidence advice, 3 August 2026. If you see these, get professional advice and contact your insurer.

Harder-to-insure homes

Listed, thatched or non-standard?

Online calculators are built around typical brick-and-tile homes. Listed buildings, thatched roofs, timber frames and other non-standard construction often need specialist materials and craftspeople, so the ABI's advice to use a chartered surveyor's Rebuilding Cost Assessment applies most strongly here.

Expect fewer mainstream insurers and more questions. A broker who specialises in non-standard homes is usually the quickest route to cover that fits. And if your home is at high flood risk, check whether it qualifies for Flood Re.

Questions

Straight answers

What does buildings insurance cover?
The structure (roof, walls, windows, floors) and permanent fixtures such as fitted kitchens and bathroom suites. According to the ABI, it pays for repairs, drying out or decontamination, a full rebuild if needed, and alternative accommodation while your home is uninhabitable. Garages, sheds and greenhouses vary by policy.
How do I work out the rebuild cost of my house?
Measure the external floor area of each storey and enter it into the free ABI/BCIS rebuild cost calculator. The ABI notes this only gives a rough figure: the most accurate route is a chartered surveyor's Rebuilding Cost Assessment.
Should I insure my home for its market value?
No. The ABI is clear that your sum insured should be the rebuilding cost, not what you paid or the market value. Market value includes the land and location; rebuild cost is labour, materials, demolition and professional fees.
What happens if I'm underinsured?
The sum insured is the maximum the insurer will pay. Many policies also apply an average clause, cutting each claim in proportion to the shortfall. Insure 80% of the true rebuild cost and even a small claim could be paid at 80%. Use the rebuild checker above to test your own numbers.
Is subsidence covered by buildings insurance?
Usually yes, often with a higher compulsory excess. The average subsidence claim reached a record £20,000 in Q2 2026 (ABI). If your home has had subsidence before, expect specialist underwriting.
Do I need buildings insurance if I own a leasehold flat?
Usually not directly: in most blocks the freeholder or managing agent insures the building and recharges you through the service charge. Your lease confirms it. You'll still want contents insurance.

Sources

Where the numbers come from

We use primary sources only: trade bodies, regulators and government. Figures were checked on 6 October 2026. Spot something out of date? The source link is the fastest way to check.

  1. Association of British Insurers. Buildings insurance: consumer guidance. accessed October 2026.
  2. Association of British Insurers. Contents insurance: consumer guidance. accessed October 2026.
  3. BCIS (commissioned by the ABI). ABI/BCIS Rebuilding Cost Calculator. accessed October 2026.
  4. BCIS for the ABI. House Rebuilding Cost Index (HRCI). August 2026 reading.
  5. BCIS. Rebuild cost models update shows uplift in reinstatement costs. 31 July 2025.
  6. Association of British Insurers. Average claim for subsidence reaches record £20,000 amidst hot weather (Property Insurance Tracker, Q2 2026). 3 August 2026.
  7. Association of British Insurers. Adverse weather pushes property insurance payouts to £6.1 billion in 2025. 17 February 2026.

Keep going

Home insurance UK →What buildings and contents cover do, which you need, and how to compare policies on more than price.Contents insurance →Add up your belongings room by room and spot items over the single-item limit.Average home insurance cost →ABI premium data by quarter, plus what paying monthly really costs.Flood insurance & Flood Re →Check whether your home can be covered through Flood Re and what changes in 2039.