While these figures remain a concern, there has also been some progress made along the road to tackling underinsurance. Both the percentage of underinsured properties and the average extent to which they are underinsured have fallen compared to previous years.
Care home facilities at severe risk
This year, the data pays particular attention to which kinds of buildings in the UK are at most risk from underinsurance. On average, underinsured properties are covered for just 67% of their true rebuild cost – up from 63% in 2024. Nursing/care homes stand out as particularly vulnerable. Of all the properties we assessed, 85% were found to be underinsured, potentially leaving critical care facilities dangerously exposed.
Commercial properties as a whole face a substantial risk. With 71% underinsured, it’s feared that many commercial property owners are simply unaware of the consequences. Many businesses are at serious risk of being unable to recover if the worst were to happen.
The rise of overinsurance
While underinsurance continues to dominate the headlines, this year's data highlights a less recognised yet growing problem – overinsurance. Currently affecting almost a quarter of UK properties, overinsurance has risen sharply from 14% two years ago to 23% today. These properties are typically insured for around 129% of their accurate rebuild costs, causing unnecessary financial strain through inflated premiums.
“Encouragingly, we are beginning to see small signs of progress, with a slight drop in both the percentage of underinsured properties and the average shortfall in cover. While underinsurance remains a huge concern, we cannot overlook the growing issue of overinsurance. Both extremes pose financial risks and only accurate, regular valuations can address this challenge,” said Johnny Thomson, Head of Strategic Planning at RebuildCostASSESSMENT.com.
Accurate valuations essential to mitigating risk
RebuildCostASSESSMENT.com, which recently carried out a record 4,611 property insurance valuations in a single month, reiterates the importance of regular and precise assessments. “Without regular, accurate valuations, property owners and brokers remain vulnerable. Our data clearly shows that effective risk management begins with understanding true rebuild costs,” says Johnny Thomson.
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