Reinstatement Cost Assessment
Reinstatement Cost Assessments accurately determines how much it would cost to rebuild your property in the event of destruction. With an up-to-date rebuilding cost assessment, you can ensure that you have adequate insurance to cover the cost of a rebuild if a catastrophic incident. These are incidents such as a fire, causes the total loss of the building.
What Is A Reinstatement Cost Assessment?
Reinstatement cost (or rebuilding cost) assessments are detailed calculations that set out how much a property, building or entire portfolio would cost to rebuild.
Many people assume that a property’s worth is its market value but, in the event of property destruction, the cost of rebuilding the property is likely to be significantly higher than its original market value. Due to this, it’s vital to have sufficient insurance coverage in place. This is so that you don’t suffer financial loss if you have to make a claim in the future.
Reinstatement Costs and Associated Fees
Reinstatement costs depend on numerous factors, such as:
- Size and scope of the building
- Construction materials used
- Non-standard construction (e.g. Listed buildings)
However, a reinstatement cost assessment isn’t just limited to the cost of physically rebuilding the property. Instead, a holistic approach is taken to ensure the cost of the entire project is accounted for.
For example, if part of the property has remained in situ, demolition and/or site clearance may be required before rebuilding can begin. In addition to this, professional fees, such as the cost of architects, designers and contractors, may need to be incorporated to facilitate a rebuild. Furthermore, there can be costs associated with securing the relevant planning permission and/or building permits.
As you can see, calculating an accurate rebuilding cost assessment is about much more than simply estimating how much it would cost to construct a similar building. Indeed, it’s easy to see why so many properties are underinsured. You must consider all of the costs that are associated with a rebuild!
How the Estimated Reinstatement Cost is Calculated
The estimated reinstatement cost should be calculated in accordance with up to date RICS pricing publications. These guidelines provide uniformity across the industry and enable property owners to ensure they have an accurate estimate that is unlikely to be challenged in the future by insurers.
In order to estimate the rebuild cost, your surveyor will visit the property to take detailed measurements and conduct a visual inspection. Assessing the layout, construction and special architectural features will be a critical part of calculating the estimate, too.
Using this information, your surveyor will draft a comprehensive calculation of the total rebuilding costs, including the cost of demolition, site clearance and professional fees (if applicable).
Why Do You Need a Reinstatement Cost Assessment?
Many people assume property or buildings insurance includes the cost of a rebuild but this is rarely the case. When you purchase an insurance policy, it’s up to you how much you want to ensure your property for. If you insure it for less than the rebuilding cost and the building is destroyed, your insurance coverage won’t fund the full cost of a rebuild. Instead, you’ll be required to fund part of the project out of your own pocket.
With an accurate rebuilding costs assessment, you can ensure that you have a sufficient level of insurance coverage. By doing so, you’ll mitigate your risk and protect yourself from financial difficulties. This is in the event that you need to make a claim.
To find out more or to arrange a rebuilding cost assessment with a RICS Chartered Surveyor, contact our team now on 020 3176 0029, email us at info@tcl-surveyors.co.uk or send us a message here.