Underinsurance

We are at the forefront of encouraging business and homeowners to upgrade their buildings to achieve better environmental standards. These improvements are essential for reducing carbon emissions and meeting EPC targets. As a result, there is increased recognition amongst buyers and tenants of the increased value of an energy efficient property.

However, a new report from Rebuild Cost Assessment warns of a growing issue: underinsurance.

What are the risks?

• Energy-efficiency upgrades increase rebuild costs, but many homeowners and businesses haven’t updated their insurance policies.
• A £50,000 retrofit might cut bills - but if insurers aren’t informed, the property could be underinsured by tens of thousands.
• With 70% of UK homes potentially underinsured, this gap is becoming a serious factor in exacerbating the issue.  Energy efficiency changes often raise the cost of rebuilding a building after damage - but unless the insurance policy reflects the new value, homeowners and businesses may face reduced payouts due to the “Average Clause.” If a property is under insured by 10% then the payout will be proportionally reduced too.

Common Triggers for re-evaluation of insurance cover

• Heat pumps replacing gas boilers
• Solar panels and battery storage
• High-spec insulation and triple glazing
• Smart energy systems and ventilation upgrades

 What Should Homeowners and Businesses Do?

• Review buildings insurance after any retrofit.
• Request a rebuild cost assessment from a qualified surveyor.

 Why It Matters

As the UK pushes toward net-zero, domestic retrofits are accelerating. But without proper insurance updates, homeowners risk turning smart investments into costly oversights. Those working within the energy efficiency should work together to raise awareness and embed insurance reviews into retrofit programmes. 

Retrofit Coordinators are responsible for holistic risk management - this includes advising clients on insurance implications.  Coordinators should include advice to undertake an insurance review in the handover pack.

Published 23-08-2025