Why insurance accuracy fails at every level of property value
- RebuildCostASSESSMENT.com
- 1 day ago
- 3 min read
Many UK property owners assume that higher sums insured lead to better protection. New analysis shows this is not the case.
While awareness of underinsurance has grown, insurance accuracy remains low across all major sums insured bands. As sums insured rise, behaviour changes – but accuracy does not. Underinsurance often gives way to overinsurance, while correct cover remains rare.
This research builds on our annual property insurance infographic, which found that just 7% of UK properties are insured accurately. The remaining 93% are insured incorrectly, with 70% underinsured and 23% overinsured. Looking more closely at how accuracy varies by sum insured helps explain why the issue persists.
Lower sums insured: underinsurance remains widespread
Properties insured for between £250,000 and £750,000 show the highest levels of underinsurance. In this band, 78% of properties are underinsured, while only around 5% are insured accurately.
This challenges the belief that lower-value properties are easier to insure correctly. In many cases, sums insured appear to be based on rough estimates rather than formal rebuild cost assessments. That leaves owners exposed to serious shortfalls if a major claim occurs.
Smaller properties are not simpler to insure. In fact, the data suggests they are among the most vulnerable.
Mid-range sums insured: behaviour shifts, accuracy does not
As sums insured increase into the £1.5 million to £2 million range, behaviour begins to change – but not in a way that improves accuracy.
Underinsurance falls slightly, but it still affects 62% of properties. At the same time, overinsurance rises to 30%, while accurate insurance remains uncommon.
This suggests greater engagement at these values, often with closer broker involvement and more frequent reviews of cover. However, rather than improving accuracy, this engagement changes the type of inaccuracy. Many properties move from being underinsured to being overinsured.
The key issue remains the same. Without an evidence-based rebuild cost, decisions are still driven by assumptions.
High sums insured: overinsurance becomes the main risk
For properties insured for between £5 million and £10 million, the balance shifts again. In this band, overinsurance becomes more common than underinsurance, with 49% overinsured compared to 41% underinsured.
Rather than moving closer to accurate cover, many properties at this level overshoot the mark. Sums insured are increased to provide reassurance, but often without confidence that they reflect the true rebuild cost. This can lead to higher premiums and continued uncertainty.
Johnny Thomson, Head of Strategic Planning at RebuildCostASSESSMENT.com, says, “There’s a common assumption that insurance accuracy improves as property values rise. What our data shows is that this simply isn’t the case. As sums insured increase, behaviour changes, but accuracy does not.”
Behaviour changes, accuracy does not
Across all sums insured bands, one conclusion is clear: accurate insurance remains the exception. Whether a property is insured for hundreds of thousands or several million pounds, guesswork still dominates.
The issue is not how high the sum insured is, but how it has been calculated. Increasing the figure without a proper rebuild cost assessment does not remove risk; it simply changes its form.
Johnny Thomson concludes, “These findings reinforce the need for regular rebuild cost assessments at every level of property value. Accurate valuations remove uncertainty, support better decisions, and help ensure claims outcomes meet expectations.”
View the full sums insured analysis
This article forms part of our wider research into inaccurate property insurance. Our new sums insured banding infographic explores the data in full, showing how underinsurance, overinsurance and accuracy vary across property values.
View the sums insured infographic here
Explore our annual property insurance infographic here.
