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Insuring for the rebuilding cost is to high

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Why should I bother insuring my house for the rebuilding cost? It's higher, so if I had a fire I'd just move to another house?

That's easy to say but not always as easy to do. It is extremely rare to find a house that is burned to the ground. Normally it is damaged and there is, at least part of the structure still standing. If this happens to you the local authority could step in and force you to spend money on keeping the structure standing or having it demolished. Either way it will cost you money and if you don't have enough insurance it will mean you could end up paying these bills yourself, just at a time when you need all the money you can get to rebuild your home. In any event, if like most of us, your house is bonded to a Bank or Building Society, that institution will insist on a policy which extends to rebuilding costs.