09/04/2024
Insights
Should I get a Reinstatement Cost Assessment?
Whilst your building stands strong and your business is in good stead, it’s hard to imagine a time when an unexpected crisis may strike where you would need to repair or rebuild your property.
However, a Building Reinstatement Cost Assessment (BRCA or more commonly RCA) could be your lifeline between being having adequate insurance cover or having a major shortfall at your time of need.
WHAT IS A REINSTATEMENT COST ASSESSMENT?
A Reinstatement Cost Assessment is an appraisal of a property via an inspection, review of construction type/features, and a report on the estimated cost to rebuild, considering its location, including allowances for demolition and fees where appropriate.
WHY SHOULD YOU GET A REINSTATEMENT COST ASSESSMENT?
An up-to-date RCA ensures that your insurance policy will provide adequate cover for the rebuilding of the property. Without a current RCA, the level of your annual insurance premium may be excessive or result in there being a shortfall in cover in the event of a claim.
Why is now a good time to get a Reinstatement Cost Assessment?
The market has been particularly volatile in recent years, with disruptions to the logistics around building materials, global construction labour shortages and ramifications from the mini budget in 2022. The insurance industry’s view of certain materials and risks also has implications for building insurance cover.
The RICS believes that one should have an RCA every 3 years, but it would be more prudent to do this more often if you want a more accurate estimation.
Where there has been significant fit out, it is also worth clarifying what elements relate to contents insurance cover and what elements relate to building’s insurance, particularly where different parties may be responsible for provision of the cover, for example where there is a Landlord and Tenant scenario (perhaps where the former is responsible for the building insurance and the later for contents insurance) to ensure there are no gaps in cover.
How do RCAs differ?
RCAs can vary dependent on the building’s use, the sector it belongs to, and even its geography or situation.
Historic or listed buildings, or those within a conservation area will often need a specialised surveyor with conservation experience or qualification to consider specialist elements.
Don’t get caught out and make sure to book your reinstatement cost assessment within good time and on a regular basis.
Nick Galloway is a Director at our building and project consultancy team in Northampton and is experienced across a range of sectors and instruction types. For more information, please get in touch with Nick or contact his email.
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