How to value a property for insurance

Home insurance can provide much-needed peace of mind by covering your property in case of accidents, damage, or other disasters. Plus, it’s often a necessary requirement when applying for a home loan with many lenders.

To make sure your home isn’t underinsured, which could leave you paying out of your own pocket when disaster strikes, or over insured, which can push up the cost of your premiums, it’s important to accurately estimate the value of your property.

Remember that the value of your property is not the same as its market price. The amount you paid for a property may be very different to how much it would cost to rebuild if damaged or destroyed.

Your property’s base value may depend upon its age, size and location, as well as the number of bedrooms, bathrooms, and car spaces. This may be affected by the construction materials used to build it, the state of the land it’s built upon, and any other special features it possesses (e.g. a pool or a granny flat).

Your home’s value may also be affected if it has an unusual or unique style. For example, if your home is an architect-designed property, or it’s a historic or heritage-listed building, an insurer could value it very differently to a more typical home of its type.

Significant renovations, such as adding extensions or new bathrooms or kitchens, could also affect a property’s value. Fresh coats of paint or new fixtures and fittings are less likely to affect its value.

Most insurers offer online calculators to help you estimate the value of your home. Generally, the more detail you can enter into one of these calculators (e.g. using your full street address rather than just your postcode), the more accurate the results may be.

A free property report can also offer a starting point for calculating the value of your property for insurance. Using available data about your property, the report can provide a benchmark for your property’s value, which you can expand upon with extra details to get a more precise result.

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