The simple answer to the question “what should the buildings sum insured be for a block of flats?” is the cost of rebuilding as new and not its market value.
The building should be insured for reinstatement purposes which is simply the cost of rebuilding a similar property as new. The building sum insured needs to include cost of making the site safe, demolishing and clearing the site, professional fees and then building as new. In addition you will need to factor in any unrecoverable VAT.
If you don’t know where the historical sum insured was derived from then the only safe option to revalue. You may be tempted to use a similar building on which to base a guess and arguably this may be a prudent temporary option in the event that you don’t have an accurate figure. However there are so many factors that can affect the cost of rebuilding this is a matter that should be left to the experts and there is no substitute for a professional rebuilding cost assessment.
