A €200,000 market value does not mean a €200,000 sum insured
Market value includes location, views, land and demand. Building insurance asks a different question: if you had to rebuild it tomorrow, what would it cost?
A small flat in an expensive area may sell for a high price. A larger or unusual house in a cheaper area may have a lower market value but a high reconstruction cost. “What would it sell for?” does not answer “what would rebuilding cost?”
It is not only floor area
Construction, roof, materials, auxiliary spaces, a swimming pool and unusual features may change restoration costs. A price per square metre is a starting point, not a mechanical final answer. First describe exactly what exists and what is being insured.
Underinsurance can affect a partial loss too
Suppose actual insurable value is €100,000, but the policy declares €80,000. The insured proportion is 80%.
Where a proportional rule applies, a covered loss of €1,000 may be calculated as €1,000 × 80% = €800, before deductibles and other terms. A problem with compensation can therefore start much earlier, with an inadequate sum insured.
An adequate amount today may be inadequate later
Construction costs change. An amount left unchanged for years can fall behind. The sum insured needs periodic review rather than being written once and forgotten.
Contents needs realistic valuation too
Furniture, appliances, clothes and equipment can cost much more to replace together than a quick estimate suggests. Work through your contents room by room.
Sum insured and deductible are different
The sum insured describes the value on which the insurance is arranged. The deductible describes the part of a loss retained by the insured under the terms.
If a building is insured for €100,000 and the earthquake deductible is 2% of that amount, the deductible is €2,000. Always turn percentages into actual euros. See the earthquake examples.
The ENFIA tax criterion is a separate question
The tax scheme uses a minimum reconstruction-value criterion. Meeting a tax criterion does not automatically mean the amount matches the actual reconstruction cost of every home. Check ENFIA requirements separately.
When should you review the amount?
- After a substantial renovation.
- When auxiliary spaces or special structures are added.
- When construction costs change significantly.
- After several years without a review.
- When you cannot remember how the current amount was calculated.
If you do not know why the building is insured for €120,000 rather than €90,000 or €160,000, that alone is a reason to review it.