Ensuring you have sufficient cover to rebuild your home if disaster strikes is vital but don't rely on market value when assessing the likely cost, writes Claire Shoesmith.

The television footage of families being evacuated from their homes as a result of the severe flooding in parts of the UK over the summer was heart wrenching even for those of us sitting on our sofas in our cosy homes.

Not only were these people left without a place to live, they were also - if the television reports are to be believed - left facing many months of repair work totalling hundreds of thousands of pounds.

Although in most cases the costs of rebuilding or refurbishment would have been met by the insurer, there were some homeowners without adequate insurance and these unlucky few will have found themselves facing a hefty bill.

This summer's flooding highlights the importance of making sure your home is insured.

However, simply having insurance isn't enough, says Richard Mossop, chairman of the Society of Chartered Surveyors' quantity surveying division.

The most important thing, he believes, is to ensure you have adequate insurance. (In fact having some sort of buildings insurance is a requirement of all mortgage providers.)

"Under-insuring can, sadly, in the unfortunate event of a claim, lead to a large gap between what is paid out by the insurance company and the actual costs of rebuilding the home," he says, adding that it is important not to over-insure as you will end up paying an unnecessarily high premium.

The problem of ensuring you have the appropriate level of cover centres on a common misunderstanding about home insurance.

Many homeowners believe that the value of their policy should be the same as the market value of their home, whereas in fact the buildings insurance part of your home insurance policy should be equal to the reinstatement value - that is the amount of money it would cost to rebuild the property completely in the event it was obliterated by fire, a flood or any other hazard.

It is worth noting that these costs can change over time and as a result you should reassess the relevance of your insurance policy on a regular basis. (Some policies are index-linked and provide for these increases.)

The latest survey released by the Society of Chartered Surveyors (SCS) shows that the cost of rebuilding a home has risen marginally over the past 12 months, with average increases ranging from 4.37 per cent in Dublin; 4.44 per cent in Waterford; 4.36 per cent in Cork; 4.2 per cent in Galway and 3.83 per cent in Limerick.

The largest increase was in detached bungalows in all areas, with Dublin costs up by as much as 4.83 per cent, followed by Waterford, which saw a rise of 4.58 per cent.

Cork was the next highest with an average increase of 4.52 per cent, and then Galway with 4.31 per cent. Costs rose least in Limerick, where the biggest increase was 4.29 per cent.

In the 2005-2006 period, the highest average cost increase across all house types was in Galway at 4.77 per cent, while the lowest was in Limerick at 4.22 per cent.

Mossop welcomed the fact the increases weren't excessive, but warned that homeowners must still be aware of the rises and adjust their policies accordingly.

He also said, however, that in light of the predicted slowdown in house building this year and next, it is possible that rebuilding costs may decrease as demand for builders and other labourers slackens.

This likelihood of declining prices was also backed up by Martin Whelan, spokesman for the Construction Industry Federation, who said there is anecdotal evidence to suggest that builders and other tradesmen are becoming easier to hire, a fact that in the long run may lead to a decline in prices.

He did say, however, that the number of renovations and refurbishments was on the increase and that this was keeping them busy.

According to the SCS guide (right) the most costly home to insure is a two-bedroom terraced house in Dublin at €2,161 per square metre (€201 per square foot).

This compares with a detached bungalow in Waterford, which can be insured at a cost of €1,369 per square metre (€127 per square foot.)

As you might expect, the costs of rebuilding vary significantly depending on the location of your home, with Dublin coming in top of the expense chart for every type of home. For instance, a four-bedroom detached house costs €2,023 per square metre (€188 per square foot) to rebuild in Dublin, but only €1,442 per square metre (€134 per square foot) in Galway.

These costs cover the total rebuilding of the property, including demolition, site clearance, professional fees and VAT.

They allow for standard kitchen fittings, but exclude other items such as fitted wardrobes, garages and boundary walls, and don't include house contents such as carpets, curtains or furniture.

To work out how much cover is needed, homeowners should multiply the price per square metre by the floor area of their home, so that in the case of a three-bedroom semi-detached house in Dublin with a floor area of about 95 square metres, the cost would be €203,680 (€2,144 x 95) for a year's cover.

It is important to note that this just covers the cost of the rebuilding, and home contents insurance for personal items will need to be added to this figure.

If you live in an apartment, you will most likely need only contents insurance as the buildings insurance will be included in the annual management fee, though it may be worth checking this before signing up.

The SCS guide only covers properties built since the 1960s and of no more than two storeys, so if your home falls outside of this category you are advised to seek the a help of a chartered quantity surveyor who will assess the overall cost of rebuilding your home.

"The main thing for any sort of policy is to ensure you read the small print," says Mossop, adding that if you can't face reading it yourself, you may be best getting a broker to do it for you.

As with any financial product there is a wide range of different policies on offer, providing various forms of cover at a range of prices, meaning that the best thing you can do is shop around, says Ronan Mackay, business development manager at NC Mortgage Brokers.

"It's pretty competitive out there at the moment and prices can differ significantly," he says. "It is definitely worth checking what's on offer and not just taking the first policy you find."

Mackay is also quick to warn homeowners not to automatically take the policy offered by their mortgage provider without shopping around first, as it will undoubtedly not offer the best value for money.

"The important thing is to know what you are, and what you aren't, paying for," says Mossop.

After all we don't need to have the heaviest rainfall in decades for a problem to develop in your home.

Something as simple as a leaking washing machine or dripping pipe can cause a substantial amount of damage if it has been going on under the floorboards for a while without you noticing.

Building insurance tips:

Key things to look out for when renewing your premium:

Make sure you know the up-to-date cost of rebuilding your home before you seek out a policy. This will ensure you obtain adequate cover.

Remember that home insurance policies differ, both in price and the items covered. Shopping around could save you substantial amounts of money.

Be aware that you don't have to take the policy suggested by your mortgage provider - this can often be more expensive than other policies on the market.

Watch out for the "average clause" whereby some insurers penalise policyholders who are underinsured by forcing them to pay a proportion of the costs in the event of any partial damage.

Look for "new for old" cover in order to avoid deductions for wear and tear when making a claim.

Make sure your policy is index-linked, so that the amount of cover keeps up