Calculating your sum insured
Choosing the right sum insured for your house is very important. We aim to make it easy to understand and calculate.
What does sum insured mean?
Sum insured is the maximum amount your insurance company will pay to rebuild your house if it is damaged. When taking out a house insurance policy, you choose the sum insured for your home so it's important you have sufficient cover.
This can be tricky to get right and we want to help you with this process so you don’t underinsure your house.
Sum insured is:
- the total amount it would cost to rebuild your house including demolition costs, debris removal, professional fees and council fees
Sum insured is not:
- the market value of your house or property
- how much you paid for your house
- how much the land is worth.
Reviewing your sum insured
We’ll adjust the sum insured before we renew your policy each year to make sure your cover keeps up with changes in building costs. To do this we’ll either use the Cordell Sum Sure calculator or we’ll use the building components of the consumer price index as a reference.
The new sum insured amount will be included in your renewal documents, which will be sent to you a few weeks before your policy renews. You need to review the sum insured each year to make sure it’s still enough to rebuild your home.
The Cordell Sum Sure calculator
The Cordell Sum Sure calculator is an easy way to estimate your sum insured amount – just enter your address and check the property details listed. The calculator will do the work for you and give you a figure to start with.
The calculator includes professional fees, demolition, removal of debris and GST. It also shows you information that is on the public record about your house.
How your sum insured is calculated
Here are a few things to consider when calculating your sum insured:
- the floor area of house of the house
- land slope and access
- construction materials
- quality level of the materials, the finish, fixtures and fittings
- number of levels in the house
- design style – villa, bungalow, contemporary, one-off architectural
- detached garages or carports
- recreational features like swimming pools, solar panels, outbuildings and retaining walls
- demolition costs
- council fees
- professional fees – architecture, quantity surveyor, engineer
- labour costs.
Remember to include any additional or recreational features that would increase the rebuild cost of your house. These include swimming pools, solar panels, outbuildings and retaining walls.
Get help from a professional
There are instances where it might make sense to get help from a professional, for example if you have a house that is high value, unusual or does not show up in the Cordell Sum Sure Calculator. You might just feel more comfortable with a professional’s opinion and that’s perfectly fine. You can hire the services of a:
Registered valuer
Ask them to provide an insurance valuation for rebuild purposes and make sure they include council fees, professional fees and demolition costs.
Quantity surveyor
They can provide rebuild cost estimates on any type of house. Like a registered valuer, they’ll visit your house to measure and estimate costs. They will charge a fee for this work. Find a registered quantity surveyor near you.
Licensed builder
You can also engage a licensed builder to provide an insurance valuation for rebuild purposes.
Architect
Present day value policies are an exception
Some houses will be insured for present day value, rather than sum insured. You can check your certificate of insurance to see if this applies to your home. Generally these are pre-1950s houses that haven’t been fully re-lined, re-wired or re-roofed. If you have completed these upgrades give us a call to see if we can offer you full replacement cover.
If your home is insured for its present day value, you’re covered for the market value of the house at the time of the loss or damage (excluding the value of the land), or the sum insured, whichever is less.