Property valuations – What does index-linking property mean from a property perspective?
Index linking refers to a Property Insurance condition which increases the policy sum insured at each renewal to take into account increases in property prices and increases to rebuilding costs, such as materials and labour. The majority of insurers base this calculation on the BCIS House Rebuilding Cost Index. https://www.rics.org/uk/products/data-products/insurance/bcis-house-rebuilding-cost-index/
What is the problem with index-linking property?
The purpose of index linking is to prevent a property from becoming under-insured. This is a good thing, but the calculation is based on an average of property types.
Here is a case example
Dave has a lovely property, which he insured for £542,000 in 2013. Should he be confident that index-linking has kept him protected from under or over-insurance ever since?
View the latest short animation video from our partners RebuildCostAssessment.com and find out why index-linking is a good thing but can be a bit of a problem.
If you have any questions about obtaining the right property valuation for your personal or commercial property insurance, please contact us on 0330 058 0260.