I know this doesn't apply to everyone but worth pointing out that one third of people taking out buildings insurance pay way too much in premiums as they get a premium calculated on the value of their property. It should be calculated on the rebuilding cost which can be anywhere up to 70% lower!
Does under or over insurance matter?
If you are, say, 25% over-insured then premiums will be 25% greater than is required and, in the event of a claim, insurers will pay only up to the true reinstatement cost and not the sum insured. The additional premium for the over-insurance may total a large sum over the period of your ownership.
If you are, say, 25% under-insured you are at risk of a substantial loss.
In the event of a full loss the insurer will pay out 25% less than the true reinstatement cost ie the payment will be limited to the sum insured.
In the event of a partial loss ie a fire which destroys only the kitchen or a flood which damages only the ground floor, insurers will 'pro rata' a payment ie will pay only 75% of the cost of reinstatement.http://www.insuringit.co.uk/under-or-over-insured.html
To calculate the rebuilding cost then click here (you need to register but no spam involved) :-