PRACTICAL GUIDE · HOME
How should I calculate my building sum insured?
If you had to rebuild your home today, would the amount in your policy be enough?
Use the cost of rebuilding
The building sum insured should reflect the cost of rebuilding a property with equivalent characteristics. It is not its purchase or sale price, tax value or outstanding mortgage.
Land is excluded from this calculation. For an apartment, also include its proportionate share of the building’s common parts.
How do you estimate the right amount?
Gather the property’s area and characteristics: location, construction type, quality of finishes and any outbuildings or other structures to include.
The area and an appropriate rebuilding cost per square metre help produce an estimate. There is no single rate suitable for every home. Check the areas used and avoid omissions or double counting, particularly for common parts.
We can help review these details and your policy’s sum insured. Where needed, a professional assessment can provide a more reliable valuation.
Underinsurance can affect even a partial loss
Underinsurance occurs when the sum insured is lower than the value that should be insured. Where the average clause applies, a claim payment may be reduced proportionately.
A simple example
- Rebuilding cost: €200,000
- Sum insured: €150,000 — 75% of the required amount
- Loss from a covered claim: €20,000
Applying the average clause: €20,000 × 75% = €15,000 paid by the insurer. The remaining €5,000 is borne by the owner, before any excess or other limits are taken into account.
You do not have to lose your entire home to be affected by an inadequate sum insured.Application depends on your policy. The Generali Tranquilidade Seguro Casa general conditions allow a tolerance where the shortfall is no more than 15%. This does not replace setting the correct sum insured.
When should I review the amount?
Review it regularly, especially after renovations, extensions or improvements. We recommend taking out the policy with automatic indexation of the building sum insured. At each annual renewal, the amount is updated using the index specified in the policy, reflecting changes in rebuilding costs, including materials and labour, which are affected by inflation. This helps keep your protection up to date, but does not replace a review after building work or necessarily correct an inadequate initial sum insured.
Buildings and contents have separate sums insured. Furniture, clothes and personal equipment should be valued separately.
When did you last review your home’s sum insured?
Send us your policy and property details. We will help you understand whether the amount is appropriate and what needs updating.