Reinstatement costs are extremely important, as they take into account the cost to replace, repair and rebuild a property in the event of loss. Having an accurate property value assessed is essential to being correctly insured.
Without it, you run the risk of insuring your property below the reinstatement cost, only to find that you can’t claim the full value of your property in the circumstances of an unfortunate event.
Discover why Reinstatement Cost Assessments are so important and how you can ensure you have an accurate valuation in this article.
What are the implications of Reinstatement Cost Assessments?
As a property owner, it is essential that your asset is fully insured so as to avoid huge costs if something goes wrong. The only way that an adequate level of cover can be achieved is via a Reinstatement Cost Assessment (RCA) that accurately assesses the value of the property.
Reinstatement Cost Assessments are an important part of property ownership, since over or under-insuring your asset can result in significant issues. Over-insure your asset and you’ll have to pay a premium on your insurance which won’t necessarily align with what your property is worth. This can be unproblematic if you’re dealing with a small portfolio or one-off assets, however if you're dealing with clients that have large portfolios, the overall costs of over insuring assets can be major.
By the same token, under-insuring an asset will have serious financial implications for the property owner. If the reinstatement figure is calculated inaccurately, or is not updated at regular intervals, there will be insufficient monies available to rebuild the property. This will not only impact the freeholder directly but also any tenant which can lead to further issues arising and additional associated financial issues.
How Does A Reinstatement Cost Assessment Work?
When you have a Reinstatement Cost Assessment, you’ll receive a thorough rebuild cost estimate based on BCIS build costs, other published cost information, as well as our experience of current tender cost rates. To establish the level of Reinstatement Costs will be, you will need the help of a qualified surveyor.
Sillence Hurn provide a director-led team of experienced Surveyors who possess a wealth of experience across all commercial sectors including office, industrial, retail and leisure. We’re able to utilise these skill sets in order to create an accurate cost of rebuild for your property.
What Happens In The Event Of A Claim?
In the event of a claim, your reinstatement cost estimate will be called upon as a guide to the insurance pay-out. Your insurance will appoint a loss adjuster to manage the claim and assess the extent of the damage and the cost of repair. Surveyors are often appointed to assess the damage and invoices in the reconstruction process to ensure the building is suitability reinstated. If you would like to instruct a surveyor in the event of an unfortunate event to your property, Sillence Hurn is on hand to help. Our team of Chartered Building Surveyors can also provide reinstatement cost assessments as well as an array of commercial services.