The True “Value At Risk” (VAR) Rebuild Calculator:
Don’t Fall Victim to Underinsurance
Are you underinsured for 2026? The biggest mistake a homeowner can make is insuring their property for its market sale price instead of its current rebuild cost.
Following the latest 2025/2026 guidelines released by the
Your Home Insurance policy is designed to cover the reinstatement cost—the expense of rebuilding the structure from the ground up following a major loss like fire or flood—not the land value or what the property would sell for. If this Value at Risk is calculated incorrectly, your insurer can apply the “Condition of Average,” which severely reduces your claim payout.
Use our updated 2026 House Rebuild Cost Calculator below to ensure your home is fully protected.
Understanding Underinsurance: The Average Clause Deduction
Understanding Underinsurance & The Average Clause Deduction
If you insure your home for less than its genuine reinstatement cost, you are underinsured. Under the latest 2026 insurance regulations, if a gap exists between your cover and the actual SCSI rebuild rates, your insurer is entitled to apply the Average Clause to any claim you make—even small ones for water or smoke damage.
How the Average Clause works: Your insurer will deduct a percentage from your claim payout that is proportionate to the amount you are underinsured.
Example of the “Underinsurance Penalty”:
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Actual Rebuild Cost: €400,000
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Amount You Insured for: €300,000 (You are 25% underinsured)
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Your Claim for Damage: €10,000
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Actual Payout: €7,500 (The insurer deducts 25% because of the Average Clause).
Don’t leave your payout to chance. Use our 2026 Value at Risk Calculator to ensure your figures match current market rates.
How The Average Clause Works (The Penalty)
The Average Clause penalty is calculated based on a simple ratio of your “Value at Risk.” If the amount you insured your buildings for is lower than the actual cost to rebuild them today, your payout will be reduced by that same percentage.
The Underinsurance Formula:
Amount Insured (buildings) x Loss = Payout
Current Rebuild Value (VAR)
Example: The “Hidden” Cost of Underinsurance
Imagine your home’s True Rebuild Value is €400,000 based on the latest 2025/2026 SCSI rates. However, you only insured it for €300,000 (meaning you are 25% underinsured).
Under the Average Clause, the insurer will only pay 75% of any claim you make—regardless of how small the damage is.
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A €20,000 burst pipe claim could result in a €5,000 deduction, leaving you with only €15,000.
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A €100,000 fire claim would result in a €25,000 shortfall that you must pay out of your own pocket.
Calculate Your Accurate Rebuild Cost with the Latest SCSI Rates.
To determine the correct Sum Insured for your policy and avoid the Average Clause penalty, you must calculate the current cost of construction. Relying on outdated figures is a major risk; the latest SCSI House Rebuilding Guide (released November 2025) shows that national average rebuild costs have risen by 7% over the last 12 months.
Our Value at Risk (VaR) Calculator is fully updated with these November 2025/2026 SCSI rates. These figures are the industry standard used by insurers and reflect the reality of construction in Ireland today:
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Regional Variance: While the national average is 7%, costs in the North West have jumped by 9%, while Dublin and Cork saw increases of 5% and 3% respectively.
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Labour & Material Shifts: These rates account for the scarcity of skilled trades and the introduction of the Recovery Levy as of January 2025.
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Total Reinstatement: The essential figures include demolition, site clearance, professional fees (architects/surveyors), and VAT.
Use the calculator below to ensure your home has total financial protection based on the most current SCSI data.
📞 Need Help With an Underinsured Claim?
If your insurer has already applied the Average Clause to your current claim, do not accept the deduction. Contact us immediately. As expert Loss Assessors, we can review the claim, challenge the insurer’s valuation, and fight to minimize the impact of the underinsurance penalty.