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  • Writer's

79% of hobbits dangerously underinsured

Updated: May 3

As many as 79% of homes owned by hobbits would be underinsured (if they actually existed) according to research by building valuation experts

The findings mean that in the event of a claim most hobbits would be dangerously exposed to financial ruin, especially as on average their properties would be covered for less than half of what they should be.

While the scenario is of course fictional, the data itself is real, said It comes after it presented UK insurance brokers with a description of a typical hobbit house, along with image and measurements. Almost 350 brokers provided an estimated rebuild cost for the property, which was then compared to an amount determined by director Will Molland BSc MCIOB AssocRICS.

As well as 79% being underinsured, 18% were overinsured meaning almost one-in-five hobbits would end up paying too much for their cover. Just 3% fell within 5% either side of the correct figure of £726,400.

“While the exercise was of course a bit of fun and had a prize attached to it, what’s really interesting about the results is how closely they reflect the reality of under and over-insurance,” said Will Molland.’s real-world data based on assessments of close to 10,000 properties suggests that 9 out of every ten UK properties are covered for the wrong amount and of these 82% are underinsured and 18% overinsured.

“Of course, brokers know it’s definitely not their role to assess rebuild cost and that this is best left to property professionals,” said Will. “However, before rebuild costs assessments were made affordable and easy to arrange, too many policyholders were insuring on the wrong basis, such as market value, or simply guessing at how much their property should be covered for.

“We don’t want people to be like hobbits. Underinsurance in particular is a terrible situation for insurance customers to find themselves in and so we’d like to see inaccurate sums insured eradicated and policyholders protected through the widespread use of accessible professional assessments.”

£1 for every broker guess made, totalling £348, was donated to NHS Charities Together as part of the exercise.

To ensure your clients buildings are covered for the right amount, sign up for a broker account, or simply refer them to us using our simple online process.


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