RebuildCostASSESSMENT.com is warning that the majority of the UK’s listed buildings are significantly underinsured, leaving owners, brokers and insurers exposed to major financial and legal risk.
Following extensive research, the company has released a new industry report highlighting the unique challenges of insuring listed buildings, which shows that nearly four out of five Grade II listed properties are insured for only a fraction of their true rebuild cost. On average, the organisation found that listed buildings are covered for just 64% of what it would actually cost to reinstate them, after a major loss.
The findings raise serious concerns for brokers and property owners, with the potential for substantial shortfalls in claims and increased liability for advisers who fail to warn clients about the financial risks.
Commenting on the report, Johnny Thomson, Head of Strategic Planning at RebuildCostASSESSMENT.com said: “Listed buildings come with strict conservation requirements, specialist materials and heritage construction techniques that make them vastly more expensive to reinstate than a standard property. Many owners mistakenly insure based on market value rather than rebuild cost, leaving a significant and dangerous gap in cover. Our report has been created to support brokers and property owners in navigating these complexities and avoiding potentially devastating underinsurance.”
The report explains that conservation laws across the UK often require reinstatement using original methods and materials. Local authorities and heritage bodies such as Historic England and Historic Environment Scotland typically insist that repairs match the historic fabric of the building, which can dramatically increase repair times and costs. When a small part of a structure survives a loss event, insurers are usually required to rebuild the remainder to the same historic specification, removing the option of substituting modern materials.
According to RebuildCostASSESSMENT.com, misunderstanding the difference between a property’s sale price and its insurance reinstatement value remains one of the biggest drivers of underinsurance. The organisation emphasises that rebuild cost must incorporate specialist labour, heritage-approved materials, professional fees and extended repair timelines. Failure to calculate this correctly can leave policyholders severely out of pocket and may expose brokers to allegations of negligence if they did not provide adequate advice.
Johnny Thomson added: “Accurate and regularly updated rebuild cost assessments for listed buildings are absolutely essential. These properties require specialist attention and a nuanced understanding of heritage rules and reinstatement practices. Without this, both owners and brokers are at real risk.”
