How Out Of Date Is Your Building Sum Insured?
A sum insured set in 2018 is not a 2018 number any more. It is a 2026 number that stopped being measured in 2018, and construction costs did not stop with it.
How out of date is your building sum insured?
Quick answerPick the year your building sum insured was last set by a valuation and this page tells you how much building costs have risen since, as a percentage, from Australian Bureau of Statistics figures. It will not tell you what your building is worth. That takes a valuation.
This check is for people who own the building. Renting the premises you trade from? The building is usually the landlord's to insure, so start with insurance for business owners who rent.
Why does a sum insured go out of date on its own?
Quick answerBecause nothing about it moves unless somebody moves it. A rebuild cost is a live price made of labour, materials, plant and margin, and all four have kept climbing. The figure on your policy schedule is a photograph of what that price was on the day somebody last measured it.
Most commercial building sums insured are not wrong because anyone got them wrong. They are wrong because they were right once.
There is a second, quieter version of the same problem. A sum insured that goes up a little at each renewal looks like it is keeping pace. Indexation is not a measurement, it is an adjustment applied to whatever number was already there, including the error. If the starting figure was low, indexation raises a low figure by a small percentage and leaves you exactly as short as you were, in proportion.
This page is the arithmetic half of that problem, and only that half. It gives you a published percentage and a published range. It does not know your building.
One thing to settle before you go any further. If your building is a lot in a strata scheme, check who is actually insuring it, because in Queensland that depends on how the scheme was subdivided and it is not always the body corporate. What insurance is required on a commercial building sets out the split.
How much have building costs risen since the year your number was set?
Quick answerA sum insured set in 2018 sits against building costs that have risen roughly 40% across Australia since then, on Australian Bureau of Statistics figures for non-residential building construction. Set in 2021, roughly 34%. Set in 2023, roughly 16%. Those are index movements for building work in general, not a measurement of any one building.
The table below is the instrument this page runs on. Find the year your sum insured was last set by a valuation and read across. The full story of why Australian construction costs moved the way they did is on construction cost increases in Australia; this table is here to be looked up, not read as a history.
A valuation, not a figure adjusted at renewal. If it has never had one, say so.
| Year the sum insured was last set | Australia, rise to June 2026 |
|---|---|
| 2015 or earlier | at least 48% |
| 2016 | 46% |
| 2017 | 43% |
| 2018 | 40% |
| 2019 | 37% |
| 2020 | 37% |
| 2021 | 34% |
| 2022 | 23% |
| 2023 | 16% |
| 2024 | 8% |
| 2025 | 4% |
Based on Australian Bureau of Statistics data: Producer Price Indexes, Australia, June quarter 2026, released 31/07/2026, output of non-residential building construction, Australia, index reference base 2011-12 equals 100.0. Each figure is the movement from that year's June quarter to the June quarter 2026, worked out by dividing the June 2026 index level by the index level for that year and rounded to the nearest whole percent. It is measured June quarter to June quarter, so a number set late in a year is measured from the June before it. The top row is a floor rather than a figure: a sum insured set before 2015 has moved further than 48%, not less. Next ABS release 30/10/2026, and this table is refreshed against it.
For context only, and it is context rather than the basis: the same ABS series ran higher again in Queensland over the year to June 2026, at 8.7% against 4.4% across Australia, though the Australian figure is the one we work from on every building and the one this table uses.
How we set the uplift on our own renewals. At renewal we lift a commercial building's sum insured by the Australian Bureau of Statistics' annual figure for non-residential building construction across Australia, which is 4.4% for the year to June 2026, and we move to the new figure each quarter as the ABS publishes it. That applies where we already have good reason to think the building is adequately insured. Where the number looks light, or nobody has measured it in years, an index is the wrong tool, so we go back to a rebuild valuation instead. An index keeps an accurate sum insured moving with the market. It cannot make an inaccurate one right, and we do not present it as though it can.
What do published rates say a rebuild costs per square metre in south east Queensland?
Quick answerPublished indicative south east Queensland rates run from about $880 per square metre for a basic metal-clad warehouse to about $4,100 for a regional shopping complex, on the July 2025 Napier & Blakeley construction cost card. Those are costs to BUILD, not costs to reinstate, so they exclude demolition, professional fees, council charges and price movement during the job.
There is one honest way to publish these and this is it: one source, its own categories, its own words, its own date. We have not blended several guides into a tidier table, because a tidier table would hide which figure came from where. The category names below are the card's, reproduced exactly, including the size caps. Those qualifiers are not decoration. A shell only rate has no fitout in it, and a warehouse over 3,000 square metres, or one with sprinklers, is priced on a different line of the same card that is not reproduced here.
| Building, in the source's own words | South east Queensland, indicative, per square metre |
|---|---|
| Up to 10m high warehouse - basic standard, metal clad walls, no sprinklers (up to 3,000 sqm) | $880 to $1,180 |
| Up to 10m high warehouse - medium standard, precast walls, no sprinklers (up to 3,000 sqm) | $1,150 to $1,350 |
| Suburban specialty shops - shell only | $1,500 to $2,160 |
| Up to 2 storey offices - medium grade facilities and finishes with air conditioning, no lift and no sprinklers | $1,920 to $3,240 |
| Suburban supermarkets with air conditioning, excluding fitout | $2,300 to $2,820 |
| Suburban enclosed mall area - medium standard with air conditioning | $2,450 to $3,800 |
| 1 or 2 storey brick motel - medium standard, dining facilities, air conditioning, excluding fitout | $2,850 to $3,560 |
| Regional shopping complex - high standard including major stores, specialty shops and enclosed malls | $3,200 to $4,100 |
Source: Napier & Blakeley, Construction Costs, South East Queensland, July 2025. Rates are per square metre of gross building area and exclude GST. This is not a valuation of your building, and nothing on this page has measured it.
Napier & Blakeley's own caution, in their words: "It must be stressed that the information on this datacard represents a guide to a range of indicative construction costs for gross building areas, based within South East Queensland. This guide is for use in initial broad feasibilities only and we recommend that you contact your nearest Napier & Blakeley office to ensure accurate project specific costings."
Three things about that table matter more than the numbers in it.
It prices building, not rebuilding. No published Australian cost guide we could find states its rates as reinstatement or insurance replacement cost. Every one of them prices new construction. A reinstatement figure is that, plus clearing the site, plus the professional fees to redesign and certify, plus council and code compliance, plus the price movement that happens while the job runs.
How much is that worth? On one published worked valuation, professional fees came to around 12.5% of the base building figure on their own, and debris removal to around 5.7%, before any allowance for escalation or GST. That example is a strata building in New South Wales, published by Strata Community Insurance Agencies in April 2023, and those two percentages are our arithmetic on their published lines rather than figures they state. So treat them as the order of the gap and not as a multiplier for your building. The direction, though, is not in doubt: the table above is a floor, and it is a low one.
Plenty of buildings are not on it. High-bay warehouses, larger-span industrial, offices above two storeys, warehouses over 3,000 square metres or with sprinklers, childcare centres, medical suites, and anything on a corner nobody has published. Where there is no public figure we can stand behind, this page says so rather than reaching for the nearest number. Several rates we found for those types came from sources that either forbid republication or could not be reconciled against their own neighbours, and a figure we cannot show you the working for is not a figure we will print.
The one sum you can do yourself
Quick answerMultiply your floor area in square metres by the low end of the range for your building type. If your current building sum insured is below that figure, the number on your policy needs measuring properly. It is a one-way test: falling under means you are short, but clearing it does not mean you are covered.
Do it in your head, or on the back of the renewal notice. We are not going to do it for you on this page, and that is not us being unhelpful.
It only works in one direction, and that is worth understanding before you use it. Because the published rates price construction and not reinstatement, the figure you land on is deliberately too low. So a sum insured that falls under it is short, and there is very little room to argue about that. A sum insured that clears it has told you only that this rough check cannot catch the problem, which is not the same as being covered.
A number produced by a web form is an estimate wearing the clothes of an answer. A published Australian Financial Complaints Authority determination went exactly that way: an insurer's own online rebuild calculator was held to be an estimate rather than advice, and when the sum insured it produced fell short, the shortfall was the policyholder's problem. The full determination is set out on the desktop building replacement valuation page, under why a calculator is not enough.
So the crude sum above is the honest limit of what a page can do. It is a smoke alarm, not a survey. It tells you whether to look, and it is wrong for a long list of reasons that all come down to the same thing: it has never seen your building.
Where this gets it wrong, and why that matters
Quick answerA rate per square metre is an average of buildings that are not yours. Your slope, your access, your ceiling height, your fit-out, your heritage listing and your council's current code all move the real figure, and none of them are in a table.
The building sum insured guide sets out what belongs in a rebuild figure, item by item, and that is the list your sum insured actually has to cover.
What actually happens if the number is short
Quick answerTwo different things, depending on the loss. On a partial loss a co-insurance clause lets the insurer scale the payout down in proportion to how far the sum insured sits below what the policy required. On a total loss there is no scaling: you are paid the full sum insured, and every dollar between that figure and the real rebuild cost is yours to find.
Those are two separate mechanisms and owners routinely hear about only one of them.
The partial-loss version is the one with a formula, and it surprises people because the damage does not have to be anywhere near total for it to bite. The total-loss version has no formula at all, which is what makes it worse: the policy does exactly what it says, pays exactly what it promised, and the gap is simply the difference between a number somebody set years ago and what a builder charges now. The mechanics of the clause, the formula and published cases where it has bitten are in the co-insurance clause explained.
Get the number measured instead of estimated
A desktop building replacement valuation is a registered valuer's assessment of what your building would cost to rebuild, done without a site visit. We commission it at no cost to you, for our purposes as your broker, to inform the advice we give you. It comes back within three business days and we go through it with you in plain language. You are not committed to moving your insurance to find out where you stand.
Read how the desktop valuation works
FAQ
Can I just use the low end of the range as my sum insured?
No. The range is a screening tool, not a figure to put on a policy. It is an average across buildings that share a category and nothing else, it excludes things a real rebuild cannot avoid, and using the low end as a sum insured would insure you for less than the bottom of the range for a building like yours, before any of that is added back. Its only job is to tell you whether the number you already have is in the wrong postcode entirely. What goes on the policy has to be measured.
Is the percentage on this page the amount my sum insured is short by?
No, and it is important not to read it that way. It is how much building construction costs have risen since the year you picked, which tells you how far a number that stopped being measured in that year has been left behind. Whether your own figure is short by more or less than that depends on whether it was right in the first place, and on whether the building has changed since. The percentage is the floor of the gap, not the gap. Whether indexation at renewal has kept pace is a separate question, answered in underinsurance: the biggest risk to commercial building owners.
My building is in Queensland, so why does this page use the Australian figure?
Because that is the figure we work from on every building, and we would rather show you the one we actually use. The ABS does publish a Queensland series, and it ran higher than the national one over the past year, as the note under the table says. We use the Australian figure anyway, for two reasons. It is the series we apply to every commercial building we look after, wherever it is, so the number on this page is the number behind our own renewal advice rather than a different one chosen to look worse. And a state index is still an index: it is building work in general, not your building, so a bigger number would not be a better answer, it would just be a bigger number. Either way, the point of the percentage is to tell you whether the figure on your policy is worth measuring again, and only a valuation answers that.
Where do the figures on this page come from?
Two public sources, both named on the page. The percentages come from the Australian Bureau of Statistics Producer Price Indexes, June quarter 2026 release, using the output price series for non-residential building construction in Australia. The rebuild ranges come from the Napier & Blakeley construction cost card for south east Queensland, July 2025, reproduced in their own category wording. We have not blended them, averaged them or rounded them into a house number, because the moment you do that nobody can check any of it. Where a building type has no public figure behind it, this page says so instead of guessing, and where a figure could not be checked back to its source we have left it off rather than print it.
Related reading
- The building sum insured guide for what a rebuild figure has to include.
- Underinsurance: the biggest risk to commercial building owners for how often it happens and how far out the numbers are.
- The co-insurance clause explained for the formula and the published cases.
- Construction cost increases in Australia for the wider cost story behind the percentages above.
- Am I underinsured? The risk checker if you would rather answer five questions about how the number was set than look at rates.
- What insurance is required on a commercial building for who insures a strata lot, and for what to do when the bank asks for a sum insured above the rebuild cost.
- Desktop building replacement valuation for the offer itself.