What the rebuild cost estimator actually shows you
The tool on this page does not put a cost figure on your buildings. It works out the floor area of a structure from the length and width you enter, and sets out everything a buildings sum insured needs to cover if it is going to leave you no worse off after a total loss: demolition and site clearance, professional fees, building regulations and planning consent, reconnecting services, any fixed equipment built into the structure, and the extra cost of construction moving on while the rebuild is under way. It also lists the questions worth putting to a broker or chartered surveyor before you settle on a figure, and if you enter your own sum insured, it shows how a shortfall against that list could affect a claim.
Farmers reach for a tool like this because the number that matters to an insurer is rarely the number a farmer has in their head. You may know what you paid to put up a grain store fifteen years ago, or what a similar shed would fetch second-hand, but neither of those figures tells you what a full rebuild would actually require to complete. Working through the list of costs is a way of testing your own figure before a claim forces the question.
Why rebuild cost is not the same as market value
If a fire takes out your lambing shed, you need your policy to pay what it costs to put up an equivalent structure now. Market value reflects age, condition and demand. Rebuild cost reflects everything a builder needs to get the structure back up: materials, labour, fees, and clearing the site first. The two figures can be a long way apart, particularly on older buildings that have depreciated in value but would still cost a similar amount to reconstruct.
Reinstatement value versus indemnity
Most farm buildings policies are written on a reinstatement basis, meaning the insurer pays to rebuild the structure as new. The alternative, indemnity cover, pays what the building was actually worth at the time of the loss, taking wear and age into account. A twenty-year-old Dutch barn insured on an indemnity basis might attract a payout well short of what a new equivalent would cost to erect, so it is worth checking which basis your policy uses before you assume the higher figure applies. The glossary sets out both terms alongside the other cover types you will come across in a policy document.
What a rebuild sum insured needs to include
Floor area, calculated from the length and width of the building, is the starting point for any rebuild sum, but it is not the whole of it. A figure that only covers bricks and steel for the footprint of the building will leave you short if a claim ever tests it.
- Demolition and site clearance: rebuilding after a serious fire or storm usually means clearing the old structure first, which is easy to overlook when you are picturing the new build.
- Professional fees: architects, structural engineers and project managers all add to the total, and a sum insured that ignores them will not stretch to cover their invoices.
- Building regulations and planning: reinstating a building to current standards can mean work beyond simply putting back what was there before, and that work has to be paid for.
- Services: water, electricity, drainage and any other connections need reinstating alongside the structure itself.
- Fixed equipment: grain drying installations, milking parlour infrastructure and similar fittings built into the building are often priced separately from the shell.
- Inflation during the rebuild: construction costs can move between the date of loss and the date the building is actually finished, and a sum insured set without any allowance for that gap can fall short by the time the last invoice is paid.
Building type and construction
A steel-portal grain store, a traditional brick cattle byre and a timber-framed machinery shed cost very different amounts to reconstruct, even at identical floor areas, because the materials, the roofing and any specialist fittings all vary. This is one of the reasons a chartered surveyor or an experienced broker is usually best placed to put a final number on a particular building.
Location and access
A remote building with poor site access can cost more to rebuild than an identical structure beside a farm track, simply because of the added cost of getting materials and machinery to the site. A sum insured that ignores location tends to fall short for buildings tucked away on the far side of a holding.
Where the tool's output falls short
Working through floor area and the list of items above gives you a structured way to check what your sum insured needs to account for, but it cannot see the actual building. It has no way of knowing about a listed status, an unusual roof pitch, asbestos removal requirements, or a local shortage of a particular trade that is pushing labour costs up in your area. Treat what it gives you as a starting point for a conversation.
The tool does not produce a cost estimate, valuation, quotation or offer of insurance. Setting the sum insured on a buildings policy is a job for an FCA-authorised broker or a chartered surveyor who can look at the building itself.
How to use the figure once you have it
Once you have worked through the list against your own buildings, the next step is to check it against your current sum insured, the figure stated on your policy schedule as the maximum the insurer will pay out. If you enter your own sum insured into the tool, it shows how a shortfall can affect a claim even where the loss is only partial, because many policies apply what is known as the average clause, reducing the payout in proportion to the shortfall. It is also worth checking whether your policy includes index-linking, an automatic adjustment to the sum insured in line with building cost inflation, since construction costs have moved a good deal in recent years and a figure set at renewal three years ago may already be out of date. The guide to farm buildings insurance covers how reinstatement cover, sums insured and exclusions typically interact on a working farm.
Questions to ask your broker
Once you have worked through the list, a broker or chartered surveyor can tell you whether your figure lines up with how your policy is actually written and where the gaps might sit.
- Is my sum insured based on rebuild cost or market value, and does my policy schedule say which?
- Does the policy include index-linking, and how often is the sum insured reviewed?
- Does my rebuild figure include demolition, site clearance, professional fees and planning costs, or only the new build itself?
- Are specialist fittings, such as grain drying or milking equipment, insured separately from the building shell?
- What excess applies to a buildings claim, and does it vary by cause of loss?
None of this replaces a proper valuation from a chartered surveyor or a conversation with a regulated broker who can look at your specific buildings. If you are not sure where to start with that conversation, the guide to finding a regulated farm insurance broker sets out what to look for.