Declared Value vs Market Value

What is the difference between a building's declared value and the market value?

 

The declared value and market value of a building in the UK are two distinct valuations that serve different purposes:

 

Declared value (also called sum insured) is the amount you tell your insurance company the building would cost to rebuild from scratch if it was completely destroyed.

 

This includes:

• Construction costs

• Professional fees (architects, surveyors)

• Debris removal costs

• Any legally required upgrades to meet current building regulations

 

The declared value often includes the cost to replace paths, driveways, walls, fences, garages, outbuildings, and the building itself.

 

Market value is the amount a buyer would pay to purchase the property. This takes into account:

 

• Location and neighbourhood

• Local property market conditions

• Land value

• Property condition

• Potential for development

• Local amenities and transport links

 

Having your building valued by an RICS (Royal Institution of Chartered Surveyors) approved surveyor every three years can avoid the pitfalls of underinsurance.

 

We recommend using Rebuild Cost Assessment, which, in most cases, can provide a desk-top valuation using clever information technology and in-house expertise. This information can then be shared with us to check that your insurance sums are correct and, if not, take action to amend them.