According to the research, 10% of consumers thought that rebuild cost and purchase price were the same, and 20% thought that rebuild cost was higher than the initial building cost – a mistake which could prove to be extremely costly to 30% of Britons.

In fact, a semi-detached house, worth around £180,000 and measuring 742 square feet, with a garage, would cost £85,700 to rebuild if it was located in the South East and £79,700 to rebuild if it was in the North East.

Debra Williams, managing director of Confused.com, said: “The fact that one in three consumers consider rebuild cost to be the same as purchase price is unprecedented, and could see them paying over the odds year-on-year. Being financially savvy certainly pays; not only does it mean that consumers can gauge whether they are paying an acceptable amount for insurance, but they are more likely to shop around for lucrative deals if they feel that they are being sold short.

“Price comparison sites are designed to help consumers find the best deal available on the market, so that they do not find themselves out of pocket when applying for home insurance. However, the importance of basic financial knowledge should not be underestimated when it comes to finding the best deals out there.”