Insurance Value Of Building Calculator

Work out insurance value of building instantly with clear inputs, formula shown and shareable results.

About Insurance Value Of Building Calculator

Building insurance is written on reinstatement cost, not market value, because land is not at risk and cannot be destroyed. The sum insured must also cover demolition and site clearance after a loss and the architects, engineers and approvals needed to rebuild, which together add fifteen to twenty percent.

Formula

Sum insured

Sum = area x reinstatement rate x (1 + demolition allowance + professional fees)

Worked example

With the default values below, Insurance Value Of Building Calculator returns Sum insured required of $51,480,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Built-up areaminimum 0.1 ft²: 20,000 ft²
Reinstatement rateminimum 0 per ft²: 2,200 per ft²
Demolition and site clearanceaccepts 0–20 %: 5 %
Professional feesaccepts 0–30 %: 12 %

Results

Sum insured required: $51,480,000.00
Rebuilding cost: $44,000,000.00
Demolition allowance: $2,200,000.00
Professional fees allowance: $5,280,000.00

Step by step

1Values used
2Sum insured
3Sum insured required= 51,480,000.00
4Rebuilding cost= 44,000,000.00
5Demolition allowance= 2,200,000.00
6Professional fees allowance= 5,280,000.00

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Preliminary estimate only. Sum insured should be established by a qualified valuer or building surveyor and reviewed annually for cost inflation.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Preliminary estimate only. Sum insured should be established by a qualified valuer or building surveyor and reviewed annually for cost inflation.

Frequently Asked Questions

How is the Insurance Value Of Building figure worked out?

Sum = area x reinstatement rate x (1 + demolition allowance + professional fees). Building insurance is written on reinstatement cost, not market value, because land is not at risk and cannot be destroyed.

What happens if the sum insured is too low?

Average applies: the insurer pays only the proportion of the loss that the sum insured bears to the true reinstatement cost, so a partial loss is also underpaid.

What values do I need to enter?

This calculator takes 4 inputs: Built-up area, Reinstatement rate, Demolition and site clearance, Professional fees. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.