“Buildings Declared Value” is the value that you declare (often when taking out a policy) representing what it would cost to rebuild the structure of your home (or building), including things like:
- Fitted kitchens, bathrooms, and permanent fixtures
- Demolition, debris removal, site clearance
- Architect, engineering or planning fees
- Costs associated with current construction standards
It does not include the value of the land, or the market value of the property. It’s strictly replacement cost of the structure. (Deacon)
⚠️ Why Does BDV Matter?
Using the correct BDV in your policy is very important because:
- If your declared value is set too low, you can be underinsured. That means in a total loss, you might not receive enough money to rebuild.
- Many policies have “index link” or inflationary adjustments to BDV, helping the value keep up with material costs and labor increases over time. (Deacon)
- Claims can be reduced proportionally if the declared value is significantly under what is actually needed. (Some policies may have “average clause” provisions.)
🔍 Is “BDV Insurance” a Product?
If someone refers to “BDV insurance,” they might mean:
- A policy that requires you to declare the building replacement value (BDV) explicitly.
- Or ensuring the “sum insured” or coverage limit is based on BDV (sometimes called “day one replacement cost” or “full rebuild cost”).
It’s not usually a separate kind of insurance by itself—it’s more about how the insurer values your building for coverage.
âś… Bottom Line
- BDV (Buildings Declared Value) refers to the value assigned to the home’s structure for rebuilding purposes—not the land or resale value.
- Making sure your BDV is accurate is crucial to avoid being underinsured.
- If you see “BDV insurance,” clarify with your agent whether it means your policy uses declared value as the basis for dwelling coverage.