How do I calculate my buildings sum insured? Your 2026 guide

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Working out your home's rebuild cost and sum insured is one of the most important steps you need to take when arranging home insurance, to ensure that you're adequately insured and avoid underinsurance. This guide for homeowners in Ireland explains how to calculate the sum insured, what to include in your rebuild cost, and why keeping it up to date matters in 2026.

What’s covered

• What is the buildings sum insured?
• How do I calculate my buildings sum insured?
• What should I include in my rebuild cost calculation?
• What is the difference between declared value, sum insured and rebuild cost?
• What factors affect the cost of rebuilding a home?
• How much does it cost to rebuild a house?
• What should my buildings insurance cover?
• Underinsurance and the 'average' clause
• 3 ways to identify and avoid underinsurance
• FAQs

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What is the buildings sum insured?

The buildings sum insured is the maximum amount your home insurer will pay to rebuild your property after a total loss. It is based on the full cost of rebuilding your home from the ground up.

Determining the correct sum insured is one of the most important things to consider when insuring property because it directly shapes the outcome of any buildings insurance claim. If your sum insured is set too low, the payout may be less than the actual cost of rebuilding your home, leaving you to pay the rest yourself. That's why it's crucial to keep this figure accurate and up to date because rebuild costs change over time.

Important: Many homeowners assume that the market value (what your property could sell for) of their house is the amount for which the property should be insured. This is incorrect: the rebuild cost is not the same as a property's market value, and market values should not be used to calculate your buildings sum insured. It's important to insure your property for its full rebuild cost.

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How do I calculate my buildings sum insured?

To calculate your building's sum insured, you must determine its full rebuild cost (also known as total reinstatement cost). There are two main options:

Use a chartered surveyor

The best way to do this is using a chartered surveyor. A qualified chartered surveyor has the expertise to assess every factor that contributes to an accurate valuation for insurance purposes. This is particularly important for historic or listed buildings.

Nowadays, it's easier and more affordable than ever to get a property survey. Plenty of companies now offer instant online quotes and let you book appointments digitally at a fair price.

Use a rebuild calculator

Alternatively, you can use an online calculator to estimate your rebuild cost. We recommend using The Society of Chartered Surveyors Ireland's (SCSI) rebuild calculator.

To use this tool, you'll need to:

• Calculate the total floor area of your property by measuring the internal dimensions of each floor.
• For two or three‑storey homes, the upper floors are often the same as the ground floor, but if they differ, measure each level separately then add the figures together.
• Once you have the full floor area, enter it into the SCSI rebuild calculator and select the correct house type and region.
• You'll also need to add any higher-than-average kitchen fittings, finishes, or any extra outbuildings such as studios or offices.

Note: the rebuild rates apply only to standard estate‑type homes and shouldn’t be used for one‑off countryside houses or older period properties.

This tool should be used as guidance only and provides an estimate rather than a precise valuation. For an accurate rebuild cost and full peace of mind, an independent surveyor is always the best option.

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What should I include in my rebuild cost calculation?

Your rebuild cost needs to reflect all work required to reconstruct your home from the ground up. This includes:

• Demolition of the damaged structure

• Site clearance & debris removal

• Planning

• Materials

• Labour costs

• Professional fees, such as architects, engineers or surveyors

Include all parts of the property that count as the ‘building’

The 'building' is more than just the main structure, so your calculation must also account for the additional features that form part of the property. These can include:

• Foundations

• Internal fixtures and fittings

• Boundary walls

• Drains

• Landscaping

• Car parks

• Outbuildings, such as garages or sheds

Missing these additional features is a common cause of underinsurance. Remember to check your policy details so you know exactly what your insurer classifies as part of the building.

Keep records of improvements and modifications

Any changes you make to your home can increase the reinstatement cost. New kitchens, bathrooms, and extensions all add value and therefore need to be included in your calculation.

You should always inform your insurer and update your policy if you make any upgrades to your home so your home insurance cover remains accurate.

Account for inflation

Rebuild costs do not stay static. The price of labour and materials rises over time, and this directly affects how much it would cost to reinstate your home.

To keep your cover aligned with current prices, ensure your home insurance policy has index linking (which adjusts the sum insured) or review your sum insured annually to adjust for rising costs.

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What is the difference between declared value, sum insured and rebuild cost?

These terms are easily confused, so here's some clear definitions:

• Declared value: the estimated rebuild cost of your property at the start of the insurance period without factoring in inflation.

• Sum insured: the maximum amount your insurer will pay if you need to make a buildings claim. It should match the rebuild cost.

• Rebuild cost: the total cost to rebuild your property from the ground up.

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What factors affect the cost of rebuilding a home?

There are many factors which affect the rebuild cost of your home, some of which we've already mentioned above. Here are five more factors to be aware of:

1. Size and structure: The total floor area and the number of storeys determine how much labour and material the rebuild will require.

2. Location: Building costs vary by location, with major cities like Dublin typically facing higher labour rates and site costs than rural regions.

3. Materials and quality: Premium materials (such as marble) and non-standard construction methods (such as thatched roofs) can drive costs up considerably.

4. Site accessibility: If contractors face restricted or difficult access to the property, the additional time and effort required can increase overall fees.

5. Legal requirements: Any updates to building regulations, such as stricter insulation standards or enhanced fire safety measures, may add extra cost to the rebuild.

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How much does it cost to rebuild a house?

The amount it costs to rebuild a house varies widely depending on the property type, size, location and more.

According to the most recent figures from the SCSI, the minimum base cost of rebuilding a 3-bed semi-detached house (which is the most common house type in Ireland) ranges from about €270,088 in the North‑West to around €331,338 in Dublin.

Dublin remains the most expensive location for rebuild costs, while the North‑West is the lowest. Here's a breakdown of rebuild costs by region:

Source: SCSI press release

Note:

• These SCSI figures apply to estate‑type homes only. They represent the minimum base cost and include 13.5% VAT on building works and 23% on professional fees. Figures have been rounded up to the nearest €10.
• These regional figures provide general guidance only. Real rebuild costs can differ based on individual property characteristics and may change over time due to market conditions.

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What should my buildings insurance cover?

Make sure your home insurance policy includes cover for all of the following that apply to your property:

• Main structure: the house itself, including the walls, roof, and foundations.

• Fixtures and fittings: such as kitchens, built-in wardrobes, and bathroom units.

• External buildings: such as garages, sheds, etc.

• External features: such as driveways, patios, fences, boundary walls, footpaths, and swimming pools.

• Utility installations: such as private wells, solar panels, wind turbines, and fuel storage tanks.

• Additional costs: professional fees, site clearance / debris removal

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Underinsurance and the 'average' clause

Underinsurance happens when your buildings sum insured is lower than the true cost of rebuilding your home. In serious cases of underinsurance, the insurer may decide not to cover the claim at all, which can create a significant financial burden at the worst possible time.

The 'average' clause

Another key point to consider is the average clause (sometimes called the average rule). It is a mechanism most insurance companies use to adjust claim payments when a property is underinsured. If you have not insured your home for its full value, the premium collected does not reflect the actual risk.

Put simply, your claim payment is reduced proportionally to the degree you are underinsured. So, if you are 50% underinsured, the claim settlement will be reduced by 50%.

Here's an example of how this might apply to a proportion of the sum insured for a home insurance claim:

• Imagine you estimate the sum insured at €240,000 and buy cover for that amount.

• When you need to make a claim, an evaluation reveals the total reinstatement cost to be €400,000, meaning your policy only covers 60% of the true value.

• With the average clause applied, the insurer may only pay 60% of your claim, because you're 40% underinsured.

• So, if you claim €100,000 in damage, your insurer would only pay €60,000, leaving you to cover the remaining €40,000 yourself.

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3 ways to identify and avoid underinsurance

Underinsurance can expose you to serious financial risk. Here's what you can do to protect your home:

1. Understand your policy limits and clauses

Take time to read through the full details of policy limits, exclusions and especially the 'average' clause, as this can greatly reduce a claim payment if you're underinsured.

2. Review your home insurance policy regularly

If your buildings or contents insurance has not been updated for a few years, it may no longer reflect the true value of your property or belongings. You should aim to re-assess your level of cover annually.

3. Check your sums insured

Compare the total value of your home and contents with the sums insured shown on your policy. If there is a significant gap, you may be underinsured.

Also read: How to avoid underinsuring your home

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Sources:

• Society of Chartered Surveyors Ireland

This is a marketing article from Howden Insurance. The information in this guide is accurate at time of publication. This content is provided for general information only and does not constitute financial or insurance advice.