Underinsurance rife as just 7% of properties covered adequately

Just 7% of UK homes are correctly insured, according to research from property valuation firm RebuildCostAssessment, an Ardonagh Group company.

The findings, released in September 2025, were compiled from an analysis of over 43,000 comprehensive property assessments and suggested that some 70% of properties were underinsured, with a further 23% overinsured.

Underinsured properties were found to be covered for just 67% of their actual rebuild cost, up from 63% in 2024.

Nursing and care homes suffered from the most severe levels of underinsurance, with 85% having incorrect cover, while doctors’ surgeries, hotels, offices, schools, places of worship, agricultural buildings and factories all had higher than average levels of underinsurance.

The report suggested that many commercial property owners were “simply unaware of the consequences” of insufficient insurance, leaving them at “serious risk of being unable to recover if the worst were to happen”.

Overinsurance

While underinsurance remained the most prevalent cover issue, overinsurance has grown recently as an area for concern – 23% of buildings were found to be overinsured in 2025, up from 14% in 2023.

Johnny Thomson, head of strategic planning at RebuildCostAssessment, said: “Encouragingly, we are beginning to see small signs of progress, with a slight drop in both the percentage of underinsured properties and the average shortfall in cover.

“While underinsurance remains a huge concern, we cannot overlook the growing issue of overinsurance. Both extremes pose financial risks and only accurate, regular valuations can address this challenge.

“Without regular, accurate valuations, property owners and brokers remain vulnerable. Our data clearly shows that effective risk management begins with understanding true rebuild costs.”