The hidden risk facing high-value homes

Rarely straightforward

Standard insurance policies are often built on averages, but there is nothing average about a unique luxury home, including those with protected features such as a Grade II listing. Johnny Thomson, Head of Strategic Planning at RiskStop, a trusted NFU Mutual valuation partner and a pioneer of risk management services, notes: “Seven out of ten properties are underinsured, and on average, they’re only covered for around two-thirds of what they actually need to rebuild.”

He adds, “The most common cause of underinsurance is people insuring their property for its market value, rather than what it would actually cost to rebuild”. This is a critical distinction. In many cases, particularly with bespoke homes, the cost of clearing a site and rebuilding to modern standards far exceeds the price a buyer might pay for the finished product.

“From the tens of thousands of rebuild assessments we’ve carried out, only around one in ten properties is insured for the correct amount,” notes Johnny. Clearing the site is vital in any rebuild, but it’s also the step that’s generally overlooked. John Pirone, Business Development Manager at RiskStop, notes: “People often forget about demolition, site clearance and professional fees, yet these are some of the most commonly missed and most expensive elements of a rebuild”.

The challenge with listed or distinctive homes is that repairs often require traditional building methods, specialist materials and skilled craftspeople. Johnny explains: “With listed properties, you’re not just rebuilding a house, you’re restoring it to its previous standard, using specialist materials and skills”. This requirement can drive costs significantly higher than modern construction. Sourcing rare materials and hiring master craftsmen is a time-consuming process. Rebuild rates for these properties can vary wildly, sometimes exceeding £6,000 per square metre.

Personal impact

Perhaps the most overlooked factor is time. Homeowners can be displaced for extended periods, and the personal impact of a multi-year restoration is significant. “When underinsurance occurs, it’s not just a financial problem – there can be very real emotional and mental consequences as well,” says Johnny.

To help prevent this, we recommend a professional valuation at least once every three years, ensuring your cover keeps pace with rising rebuild costs and the specialist requirements of high-value or heritage properties. At NFU Mutual, we take a relationship-led approach rather than a transactional one. Our Bespoke Home Insurance is tailored to each property, recognising the complexity of heritage features and the realities of conservation requirements. It’s designed specifically for high-value homes, typically with contents over £150,000.