Underinsurance and the proportional rule explains why the figure matters. This is the method: how to actually arrive at a rebuild value that reflects your property, not a generic average, and holds up if it is ever tested.
What we analyse in a high-value home
In a property of real value the right cover is a matter of analysis, not of choosing a product. We look at the house, the way it is used and what is inside it, and only then approach the insurers whose underwriting fits.
Rebuild cost and sums insured
How the cost of rebuilding is established, whether the sums insured are sufficient and whether the policy limits the indemnity in any way — including how underinsurance and the proportional rule would apply.
Fire, flood, storm, earthquake and water
Which natural and accidental perils are covered, on what terms, with which excesses, and what local exposure — coast, river, slope, seismic zone — means for acceptance.
Contents, art, jewellery and collections
Whether contents are insured at a realistic value, which items need to be scheduled, how they are kept and what limits apply per item and in total.
Gardens, pools, outbuildings and equipment
Walls, pools, annexes, garages, solar installations and outdoor equipment: what is part of the building sum and what needs to be declared separately.
Liability, staff and the way the house is run
Liability limits set against the real exposure — guests, domestic staff, contractors, management services — and the cover that each of them may need.
Special properties and ownership structures
Historic or listed houses, unusual construction, properties owned through a company, and several homes in Portugal and Spain that should be insured coherently.
What we need to prepare a proposal
- Address, year of construction and gross area.
- An estimate of the rebuild cost, which we review with you; for Portugal we use the APS SCRIM simulator as a reference.
- Contents and valuables to insure, and how they are kept.
- Security, occupancy and any claims in the last five years.
- Your current policy, if there is one.
We assess the risk, analyse the conditions available and look for the protection that fits. All cover is subject to the insurer’s acceptance of the risk and to the terms of the policy issued.
Insurers and specialist partners
Adler & Rochefort works with insurers and specialist partners in the protection of private wealth, including Hiscox, Chubb, Liberty Mutual, Hispania and Innovarisk. The choice of solution depends on the characteristics of the property, the sums insured, its use and the underwriting conditions available. All cover is subject to the insurer’s acceptance of the risk and to the terms of the policy.
Start from the right question
The question is not "what is the property worth". It is "what would it cost to rebuild this specific structure, on this plot, to the same standard, today". That excludes the land entirely, and it is why a coastal apartment with a view can have a rebuild value far below its market price, while an unremarkable inland quinta with thick stone walls and a slate roof can cost more to reconstruct than it would fetch on the open market.
The base calculation
Start with a €/m² construction cost appropriate to the building type, applied to the habitable floor area:
| Construction type | What drives the rate |
|---|---|
| Standard contemporary build | Concrete-frame or block construction, standard finishes — the lowest of the four bands, and the one a generic online average is usually built on. |
| Mid-to-high specification villa | Higher-grade finishes, larger glazed areas, more complex roof forms — commonly built and priced above the standard band. |
| Traditional / stone construction | Solid stone or rammed-earth walls, traditional roof structures — often more expensive to reinstate than a modern equivalent, not less, because the skills and materials are specialist. |
| Listed or heritage property | Reconstruction in original materials and techniques, sometimes under municipal or heritage oversight — the highest band, and one where a written valuation is worth commissioning rather than estimating. |
Indicative bands, not quoted rates — construction costs move and vary by region; treat this as the structure of the calculation, and get current local rates for the actual figure.
What gets left out, and shouldn't
A figure built purely on the house's own footprint routinely misses the items that are cheapest to add now and most expensive to discover missing later:
- Swimming pool — has its own reconstruction cost, separate from the building.
- Boundary walls and gates — often substantial on a large or sloped plot.
- Garage, annexes and outbuildings — a separate structure needs its own line, not a percentage guess.
- Terraces, pergolas and outdoor structures — easy to treat as landscaping rather than as building fabric.
- Solar panels and technical installations — increasingly standard, and increasingly expensive to replace like-for-like.
Imported and high-specification finishes
A blanket €/m² rate assumes standard local materials and labour. Imported stone, specialist joinery, underfloor systems, or any finish sourced and fitted outside the normal local supply chain costs more to replace — sometimes considerably more, if the original supplier or a close match has to be sourced again. These should be declared and valued individually, not assumed to be absorbed into the average rate for the property type.
Demolition, debris removal and professional fees
The rebuild figure is not finished until it also accounts for what happens before rebuilding starts and around it: clearing what remains of the structure, and the architect's, engineer's and licensing fees a project of this size genuinely requires. Both are commonly missing from a figure built purely on construction cost per square metre. See what a total-loss settlement actually covers for how these are applied at claim stage, and build them into the figure now rather than discovering the gap then.
Why the figure needs revisiting every year
Construction costs move even when the property itself has not changed — labour, materials and licensing all drift, generally upward. An indexation clause in the policy adjusts the sum insured against general inflation only; it cannot account for a renovation, an addition, a pool installed since the last review, or a rate that was already too low when it was set. Reviewing the figure at every renewal, against an actual schedule of what the property now includes, is the only version of "keeping it current" that actually works.
Not sure your sum insured is right?
Tell us about the property — construction type, pool, annexes, any imported finishes — and we'll help you work through the figure.
The same method in Spain
The method transfers to Spain unchanged: rebuild cost, not market value; a base rate per square metre for the construction type and finish; every structure on the plot added separately; imported finishes, demolition and fees on top. The proportional rule has a direct Spanish counterpart, the regla proporcional, and it cuts a partial claim on an under-insured house in exactly the same way.
Two Spanish reference points are worth knowing, and neither should be taken as the answer. A mortgage valuation, tasación, carried out under the Spanish valuation rules usually states a separate insurance value, valor de seguro; it is a useful cross-check, but it is built for the lender and can lag behind a high specification. The cadastral value, valor catastral, is a tax figure and has no bearing on rebuild cost. Construction costs also vary more by region than many owners assume — between Madrid, the Balearics and the Andalusian coast as much as between Lisbon and the Algarve.
Two further points bear on the figure in Spain. Catastrophe damage — earthquake, extraordinary flood and similar events — is paid by the Consorcio de Compensación de Seguros against the sums insured in your policy, so the rebuild figure governs that claim too. And specialist insurers in both countries commonly waive the proportional rule once the sums from their own appraisal are accepted, which is the strongest reason to have the figure set properly once. See insuring a high-value home in Spain and high-value home insurance in Spain.
Adler & Rochefort is a commercial brand of Ownizo, Unipessoal Lda., registered with the Portuguese Insurance and Pension Funds Supervisory Authority (ASF) under no. 425591790/3. General information only, not a valuation or personalised advice; construction costs vary by region, specification and date, and a specific figure should be confirmed with a qualified valuer or surveyor.
More on this subject: Underinsurance and the proportional rule · What a total-loss settlement covers · Waiver of average: what it is and what it costs