What is a building reinstatement cost assessment?

  This used to be known as a fire insurance valuation, but the Royal Institution of Chartered Surveyors (RICS) changed the name as buildings are insured against more than just fire risk. Not to mention the fact that the word ‘valuation’ would often make people confused between the projected cost to re-build and the current market value of their property. We enable clients to get more from their real estate and drive adequate insurance of buildings by providing full, elemental and accurate evaluations of rebuilding costs in the event of destruction. Reinstatement Cost Assessments (RCAs) are required by most insurance underwriters and are highly technical.. Having the right insurance for your property is one of the most fundamental ways to reduce risk. You need to know in the event of a major incident, there are sufficient funds available to rebuild the property to the same specification as before. Building Reinstatement Cost Assessment (BRCA) provides an overview of the anticipated cost of reconstructing a building in the event of damage or total loss due to an insured risk, for insurance purposes. Buildings must be insured to cover the full cost of demolition and rebuilding, together with any other allowances for professional fees. For leased buildings, the insurance policy may cover ground rent and an alternative accommodation for the lessees, but this should be clarified with the insurance company. An accurate Reinstatement Cost could save you money on your insurance premiums by accurately determining the value of your property before you obtain a quotation. In the event of an insurance claim being made; the first thing the underwriter will ask for is a Reinstatement Valuation. If your property is undervalued, you might not receive the full value of your insurance claim. Although many buildings insurance policies are index linked, it is still sensible to obtain regular Reinstatement Valuations to ensure sufficient cover. The purpose of index linking is to prevent a property from being under-insured. If your policy is index linked, if there's a change in the rebuild cost, your insured amount will increase automatically. For this to work the amount insured must be correct at the start of the policy    

How we can help

We have a sound understanding of construction and the development process that enables us to accurately assess the likely costs and associated considerations for re-constructing a London located building. Our team will consider the particular requirements and tailor a solution that reflects the perceived risks associated with the property and your insurer’s requirement, which is likely to include:
  • Undertaking thorough site inspections to understand the different forms of construction
  • Reviewing existing drawings and/or undertaking a detailed measured survey of properties to ascertain the gross internal floor areas
  • Calculating the day one building reinstatement cost using current cost information and documenting our findings in a brief and clear report
  • Liaison to understand your aims/requirements
  • Undertaking desktop-based re-assessment valuations based on changes in the building cost Index for properties with accurate re-building values, on an annual basis
We take an elemental approach, delivering greater transparency, fairer apportionment and less risk of inaccuracy in the rebuild cost. We also prioritise the full scope of insurance, to include the landlord’s obligations under the lease and the scope of occupiers’ contents. If you would like advice on Building Reinstatement Cost Assessment matters, please call our office on 020 7391 7100 or email us at surveyor@fandt.com