An insurance firm claims the drive to improve EPCs could be a “ticking time bomb” for landlords and other home owners.
Some 76% of UK properties are already estimated to be underinsured, claims the RebuildCostASSESSMENT company.
This is before raised EPC requirements for the private rental sector kick in across England and Wales, and before Scotland’s proposed Heat in Buildings legislation.
A statement from the insurance firm says:
“Energy efficiency upgrades are good news, but the hidden insurance consequences could be serious if insurers aren’t informed and policies aren’t updated. Being underinsured means property owners may not get the full payout when they need to make a claim. So, they could be left to foot the bill.”
And a company spokesperson adds: “it’s essential to warn property owners about how they alter building specifications and raise rebuild costs. Scotland’s proposed Heat in Buildings Bill, for instance, requires extensive changes to heating and insulation, signalling a major wave of retrofits and upgrades.
“England and Wales have raised minimum EPC requirements for rentals, and property owners are investing in upgrades to save on energy bills and comply with evolving regulations.
“Several factors are at play, driving up the cost of rebuilding a property. For example, high-performance insulation improves thermal performance but is notably more expensive than what older buildings contain.
“When fitting efficient glazing, top-tier windows and doors cost hundreds of pounds more per unit, while airtightness works typically require skilled contractors or even a mechanical ventilation system, adding additional expense and complexity to reconstruction.
“The level of these upgrades and energy-efficient construction comes at a price that greatly risks property owners becoming seriously underinsured.
“These retrofits will occur and have many benefits that improve the property, but it’s so important to get a rebuild cost assessment after works are completed, not to slip into underinsurance. Even a mid-sized retrofit can shift the rebuild value upward.”
This article is taken from Landlord Today