Your home is likely to be your biggest financial asset and property insurance provides you with the financial protection for the things you have worked hard to obtain and peace of mind for you and your family. The buildings sum insured must be the full rebuilding cost of the property at today’s prices. The market value of your home has no direct relationship to the rebuilding cost. For example, if you insured the buildings of your home for 100,000 and the rebuilding cost is actually 200,000 then all insurance companies’ will deal with the claim on what is known as an “Underinsurance” basis. This means that the sum insured is not enough to cover the maximum loss or damage and you will need to find, possibly, a substantial financial amount yourself due to the underinsurance. The unfortunate reality is that life does not always go as planned, a fire for example could totally destroy the home and this can happen to the most careful and cautious people. Equally, and again as with all insurance companies you cannot make a profit from an insurance claim; so if you over insure the property you will not be entitled to the difference. One of the main principles of insurance is to put you back in the same position as you were before the loss or damage.