In the case of property insurance, the amount to be insured should be the reconstruction value. In the case of contents insurance, the replacement value of all items included in the contents should be insured (for example, if you have a television, you should insure the current value of a television with the same characteristics and not the value that the television cost in 2000).
What is the reconstruction value?
It is the amount it would cost to build the property or unit in question from scratch. And what is that amount? The most appropriate thing would be to ask a builder and stick to that amount, but this is often difficult to achieve.
To make things easier (and this is the method used by experts in the event of claim), a decree is used that is published by the State every year and can be consultedhere.
The reconstruction values considered for 2020 are as follows, depending on the zone:
a) In Zone I: €826.73 – representing an increase of €4.20 per m² (€822.53 / 2019);
b) In Zone II: €722.68 – representing an increase of €3.67 per m² (€719.01 / 2019);
c) In Zone III: €654.74 – representing an increase of €3.32 per m² (€651.42 / 2019).
Zone I
District and municipal headquarters of the Autonomous Regions, as well as Almada, Amadora, Barreiro, Cascais, Gondomar, Loures, Maia, Matosinhos, Moita, Montijo, Odivelas, Oeiras, Póvoa do 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.
Then just do the math.
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, so we recommend a higher value, depending on the level of construction quality.
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 example 50%.
The same applies to contents. There are some types of coverage that operate on a "first risk" basis, where this rule does not apply (usually electrical risks).