How do I value my property for building insurance purposes?
The importance of a Reinstatement Cost Assessment
What is it?
Reinstatement Cost Assessments (RCA) is an estimate that is created to calculate the cost of rebuilding a property after an insurance event such as a fire, flooding or subsidence has occurred, causing substantial damage. The sum calculated represents the full cost for your damaged property to be rebuilt and restored including all other associated costs.
Why is it important?
Whether you’re the owner of the property, or the occupant, it is essential to know how much it will cost to restore your building to its original standard if a major incident should occur. Understanding your potential costs in this event is crucial to ensuring that you have the correct insurance in place to cover you.
Being under insured on a property could be a financial nightmare for any person or organisation. If a claim arose, the last thing anyone would want to find is that your insurance is not up to the date, and you won’t be fully re-compensated for the total costs to be able to restore the building. If you are ‘under-insured’ you may well find that you can only claim proportionally for the cover you have compared to the reinstatement cost the insurance company’s loss adjuster deems to be the right figure.
Can I carry one out myself or should I use an expert?
To guarantee you have the correct value in place, we recommend that you employ a qualified RICS surveyor / valuer to undertake a reinstatement cost assessment of your property.
Insurers will expect that a professionally undertaken and accurate valuation of a property’s rebuilding cost should have been done when putting a value against your building insurance cover.
Can this work be undertaken by a quantity surveyor / building surveyor? The answer is yes but it is best for you to find a chartered surveyor that specialises in this field. The more complex your building, the more important this becomes.
A good example of a company that performs this kind of work is Barrett Corp & Harrington Ltd. Based in Warwickshire, they focus exclusively on RCA’s and have a proven track record within the industry. From their website you’ll see their approach uses a combination of industry knowledge with loss adjustment that has been implemented on over 50,000 buildings and properties in the UK.
It’s also recommended by the RICS (Royal Institution of Chartered Surveyors) that you should have your property reinstatement value reviewed and reassessed at least every three years or when alterations such as an extension are made. Having an up to date RCA is key to having an accurate insurance value of your property which will then account for how inflation might affect the figure too.