The importance of reinstatement cost assessments

Why is it important to get a Reinstatement Cost Assessment (RCA)?

As research data has shown, eight out of ten UK SME's face risk towards their building insurance coverage due to underinsurance. The report suggests that the high rate of inflation means the level of cover on physical equipment and buildings may need updating to keep pace with the increased costs of replacing those assets. Reinstatement cost assessments remove the risk of underinsurance to make sure your critical assets are covered.

WHAT ARE REINSTATEMENT COST ASSESSMENTS?

Reinstatement cost assessments (RCAs), also known as building insurance valuations, are appraisals of your properties for insurance purposes. The assessment looks specifically at the cost of repairing or renewing your assets to an equal condition to when new to make sure you can claim the full value if an unfortunate event occurs.

Currently, the Royal Institution of Chartered Surveyors (RICS) recommends that full RCAs are carried out every three years. It also recommends an annual adjustment to account for inflationary effects and suggests that RCAs should be updated whenever you make significant changes to buildings.

Why are reinstatement cost assessments so relevant now?

Over the last few years, there has been significant disruption that has led to a lack of building materials, construction labour shortages and cost increases across the board. All these factors have the potential to leave property owners underinsured and highly exposed to costs if they do need to make a claim.

In light of this, as a property owner, the only way you can be confident that you have an adequate level of building insurance cover is to conduct an RCA that accurately assesses the value of your property.

What are the implications of inaccurate insurance?

Without a reinstatement cost assessment, one risk is that you overinsure your property, leaving you with a premium that’s not necessarily aligned with its value. More likely, however, particularly given the current economic climate, is that your assets are underinsured, and that could have serious implications:

• A claim does not cover the full cost of repairing or rebuilding your property
• Lengthy negotiations with your insurers when making a claim can delay the work
• You have to borrow money to complete the work
• You’re unable to access funds to rebuild the property
• Lenders and leaseholders take legal action for insufficient levels of cover
• Your reputation and brand are damaged

What is the Reinstatement Cost Assessment process?

When arranging an RCA, it’s critical that the assessment provides the full cost of demolition and rebuilding, fees to local authorities and any other allowances associated with the reinstatement. Anything less than that could lead to insufficient insurance cover and a claim for negligence.

At Eddisons, our RICS surveyors conduct site assessments and use cost databases, recent construction costs and other sources to provide reliable valuations so you can fully reinstate your assets. We can assess everything from commercial units and factories to retail spaces, listed buildings, schools and colleges.

Find out more about our reinstatement cost assessment process and get in touch for a free consultation.

RCA experience across sectors

With our experience we are able to assess properties ranging from commercial units and factories to retail spaces and listed buildings. We are also vastly experienced in the educational sphere, acting to provide valuations on academies, schools, colleges and more. These facilities often encompass a range of facilities, ranging from sports halls to science labs, and these require specialist acumen and experience when it comes to providing accurate reinstatement costs.

What is included in a Reinstatement Cost Assessment?

We make sure that our reinstatement cost assessments provide for the full cost of demolition and rebuilding, along with any other allowances, in order to provide the best level of cover and to protect our clients from negligence issues. 

If you may be seeking help with a reinstatement cost assessment for your property, contact one of our expert building consultancy team today.