Sum Insured for your Home

No two houses are alike –a renovated villa, a modern architecturally-designed home, or a 1960s brick and tile house that all have the same floor area may have significantly different costs to rebuild them. It is important that you ensure your Sum Insured is adequate to cover all costs associated with rebuilding your home. 

We have some helpful information and an easy to use calculator to help you work with your broker or insurance adviser to set an adequate Sum Insured.

Cordell Sum Sure 

You can use the Cordell Sum Sure calculator to help estimate your home Sum Insured. The rebuild cost generated by the calculator is based on the estimated cost to rebuild your home and includes anticipated construction costs, allowances for professional fees, demolition, site clearing and GST

Calculate your House Sum Insured

Understanding your Sum Insured

Your broker or insurance adviser  will ask you for a Sum Insured when you take out a Lumley home policy. The Sum Insured specified in your Policy Schedule means the maximum amount payable to rebuild your home, in the event of a total loss (a loss that requires the complete rebuild of your house, such as due to a fire, earthquake or flood).

Even if you’ve had insurance for your home for a while, it’s important to review your Sum Insured each year to ensure it’s accurate. It’s very important that your Sum Insured is sufficient to cover the total cost of rebuilding your home, including costs to rebuild your driveway, fences, swimming pool, tennis courts, sheds, garages and any other structures.  It should also include other costs associated with rebuilding such as demolition, debris removal, professional fees and compliance costs.

Sum Insured is:

  • The cost to rebuild your home on its current site, to the equivalent size and quality including features like swimming pools, retaining walls and bridges that provide the only access to the home.  
  • An amount you need to specify. Your broker or insurance adviser can help you estimate your Sum Insured using the Cordell Sum Sure calculator, or by helping you arrange a valuer to assess your property’s rebuild cost on site.

Sum Insured isn’t:

  • The Council’s rateable value 
  • The purchase price or market value 
  • The land value
  • Automatically inclusive of features such as jetties or bridges that are not the sole access to the home, unless you’ve arranged additional cover with your broker or insurance adviser.

Why you need to ensure your Sum Insured is correct

Your Sum Insured should be high enough to meet the full cost of rebuilding your home to its equivalent size and quality following a total loss. It needs to include the cost of demolition, consents and other fees. If your Sum Insured amount is too low you may have to rebuild to a lesser size or quality or pay for some of the repairs or rebuilding yourself.

How to establish your Sum Insured

Your Sum Insured is a figure that considers a range of things about your current home and the cost to rebuild it. The following need to be considered. 

  • Demolition and site clearing costs
  • Council fees and building consents
  • Professional fees
  • Cost of labour 
  • Your home’s floor area
  • Slope of land and access
  • Construction materials
  • Quality of the materials and finish
  • Fixtures and fittings (i.e. toilets and baths, oven, heat pumps)
  • Fixed floor coverings (such as carpet)
  • Number of levels in your home
  • Design style – e.g. villa, bungalow, contemporary or architecturally-designed
  • Outbuildings like granny flats, detached garages and carports, 
  • Driveways, decks, paths and fences
Features such as permanently fixed swimming pools or spa pools,   tennis courts, retaining walls, bridges, cable cars or jetties that would increase the rebuild cost of your home also need to be considered. Some of these features may have certain policy limits or not be automatically covered, so you may need to purchase additional cover for these. Tell your broker or insurance adviser if you have any and what they would cost to rebuild. Make sure you check your Policy Wording for everything you need to include in your Sum Insured. 

What to do with your estimated rebuild cost

When you want to take out a new Lumley home insurance policy, or renew your current policy, you should work with your broker or insurance adviser to consider the amount your home needs to be insured for. 

You need to review your Sum Insured at each renewal. While we may adjust your Sum Insured at each renewal to account for changes in construction costs, we can’t know of any changes or additions you may have made to your property. If you think your current Sum Insured amount is too low, we encourage you to work with your broker or insurance adviser, and they will let us know if there are any changes you want to make.
If you have bought a house, don’t rely on the market value or purchase price to determine your Sum Insured as this is very different to the price to rebuild your house. 

If you have built a house recently, you could use the build cost, however you need to consider the cost of demolition and site clearing, as well as all parts of your home that are covered by the policy such as paths and fencing.  You also need to consider inflation that may have occurred since the build cost was established or that may occur in future, and any other increase or changes that may have occurred over the policy period. If you think your current Sum Insured amount is too low, we encourage you to work with your broker or insurance adviser, and they will let us know if there are any changes you want to make.

How to calculate your Sum Insured

Use Cordell Sum Sure calculator

The Cordell Sum Sure calculator helps you to estimate the rebuild cost of your home based on publicly available property information and construction data. The calculator will prepopulate information about your property, which you will then need to check and update if incorrect. The calculator also includes professional fees, demolition, removal of debris, GST and will account for price differences in some of these services around New Zealand. 

The calculator draws on publicly available data and is updated regularly and while every care is taken to provide a reliable result, the estimated rebuilding cost produced by the calculator is intended as a guide only. The calculator won’t take into account rising construction costs during your period of insurance, so if you wish to include an allowance for this you will need to add it manually to the estimate the calculator produces.
The calculator is designed to price standard residential rebuilds, so may not be appropriate if your home is large (>500sqm), high value (>$2m) or architecturally-designed and in these scenarios, we would encourage you to use a valuation professional.

Use a registered valuation professional  

The most accurate way to estimate your home’s rebuild cost is to get the help of a valuation professional such as a property valuer or quantity surveyor. This is strongly recommended for large (>500sqm), high value (>$2m) or architecturally designed homes. QV and Construction Cost Consultants can provide valuations  for insurance purposes at a competitive price for Lumley customers. Contact them below:

Alternatively, you can find other valuation professionals below:

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