Reconstruction value in multi-risk insurance 2023

Reconstruction 2023

What is the reconstruction value?

The reconstruction value is what it would cost to build the property or unit in question from scratch. And what is that value? The most appropriate thing would be to ask a builder and insure for that amount, but this is often difficult to achieve.

Based on information provided by APROSE, we would like to inform you that numerous members have expressed an interest in maintaining access to the traditional method – and despite its availability to the general public since March 15, 2021, by the Portuguese Insurance Association (APS),of a simulator for calculating the cost of rebuilding houses or apartments (SCRIM), the values per square meter of the price of housing construction to be in force in 2023, calculated according to the method traditionally accepted by the overwhelming majority of insurers operating in Portugal prior to the launch of the aforementioned simulator, are as follows:

Reconstruction Values by Zone for 2023

In zone I: €846.63 – representing an increase of €16.60 per^m2 (€830.03 / 2022); 

In zone II: €740.08 – representing an increase of €14.51 per^m2 (€725.57 / 2022)

In zone III: €670.50 – representing an increase of €13.15 per^m² (€657.36 / 2022).

 

Zone I

It includes all municipalities that are district capitals (Aveiro, Beja, Braga, Bragança, Castelo Branco, Coimbra, Évora, Faro, Guarda, Leiria, Lisbon, Portalegre, Porto, Santarém, Setúbal, Viana do Castelo, Vila Real, and Viseu), municipalities in the Autonomous Regions (*) (**) and also the municipalities of Almada, Amadora, Barreiro, Cascais, Gondomar, Loures, Maia, Matosinhos, Moita, Montijo, Odivelas, Oeiras, Póvoa de Varzim, Seixal, Sintra, Valongo, Vila do Conde, Vila Franca de Xira and Vila Nova de Gaia.

Zone II

Abrantes, Albufeira, Alenquer, Caldas da Rainha, Chaves, Covilhã, Elvas, Entroncamento, Espinho, Estremoz, Figueira da Foz, Guimarães, Ílhavo, Lagos, Loulé, Olhão, Palmela, Peniche, Peso da Régua, Portimão, Santiago do Cacém, São João da Madeira, Sesimbra, Silves, Sines, Tomar, Torres Novas, Torres Vedras, Vila Real de Santo António, and Vizela.

Zone III

Remaining municipalities on the mainland.

Other things to keep in mind

Value should also be assigned to improvements, elevators, condominium machinery, walls, and fences.

However, these values are the minimum for reconstruction, and in the event of a claim (total loss) they may be insufficient. We therefore recommend a higher value, depending on the level of construction quality. To find out more about this subject, please visit our website, FAQs – Multi-risk Insurance and Reconstruction Capital.

In 2022, ASF, the regulatory authority, recommended that the insured capital for fire and natural elements for buildings be updated by 10.53% in the last quarter of the year to cope with inflation in Portugal.

 

Can I hold it for less capital?

You can, but you shouldn't. This is the main reason why companies do not pay the full amount of claims. If, for example, the property is worth €100,000 and the insurance is only for €50,000, in the event of claim , the company will claim pay the insured percentage, in this case 50%.

The same applies to the filling. There are some covers that work on "1st Risk" where this rule does not apply (usually electrical risks).

Please do not hesitate to contact us.

(*) Madeira Archipelago: Calheta, Câmara de Lobos, Funchal, Machico, Ponta do Sol, Porto Moniz, Porto Santo, Ribeira Brava, Santa Cruz, Santana, and São Vicente.

(**) Azores Archipelago: On the island of São Miguel, there are the following municipalities: Lagoa, Nordeste, Povoação, Ribeira Grande, Vila Franca do Campo, and Ponta Delgada; On the island of Pico, there are the following municipalities: Lajes do Pico, Madalena do Pico, and São Roque do Pico; On the island of São Jorge, there are the following municipalities: Velas and Calheta; On the island of Flores, there are the following municipalities: Santa Cruz das Flores and Lajes das Flores; On the island of Terceira, there are the following municipalities: Praia da Vitória and Angra do Heroísmo; On the island of Graciosa, there are the following municipalities: Santa Cruz da Graciosa; On the island of Faial, there is the municipality of Horta; On the island of Santa Maria, there is the municipality of Vila do Porto; On the island of Corvo, there is the municipality of Corvo).