Work out insurance value of building instantly with clear inputs, formula shown and shareable results.
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.
Sum insured
Sum = area x reinstatement rate x (1 + demolition allowance + professional fees)
Preliminary estimate only. Sum insured should be established by a qualified valuer or building surveyor and reviewed annually for cost inflation.
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.
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.
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.