Making sure you have the correct insurance cover for your property is vital, whether you own a single property as your family home or a portfolio of residential and commercial properties as an investment. In simple terms, there are two hazards that you want to avoid when insuring your property:

• The risk that your property is under-insured, meaning that in the event of any damage and a subsequent insurance claim you’ll be left having to pay potentially heavy costs.
  
• The risk that your property is over-insured, which means that the regular premiums you pay could be much more expensive than they need to be.

In most cases, people take out insurance premiums based on their own estimate of how much the property in question is worth, but this would be a huge mistake. Rather than simply being a guess, an insurance reinstatement cost assessment carried out by a RICS qualified surveyor will provide an accurate, independent and detailed report of the value of the property. The inspection carried out by a RICS qualified surveyor such as those at Crown Survey and Valuation will be detailed, delivered in line with the standards set out by the Royal Institute of Chartered Surveyors and legally watertight.

What does an insurance reinstatement cost assessment cover?

The first thing to understand about a reinstatement cost assessment is that the word ‘reinstatement’, in this context, refers to the repair, reconstruction or renewal of the asset in question to a condition which is as good as, but not better than, new. The RICS recommends that insurance reinstatement and cost assessments of this kind are carried out every three years in order to reflect any changes which might impact on the cost of reinstating a property. In addition, owners should consider having a new insurance reinstatement and cost assessment carried out whenever significant changes are made to the property in question, such as structural additions.  

The insurance reinstatement and cost assessments carried out by a RICS qualified surveyor are provided on the basis of an  inspection, either of the single property in question or of each of a portfolio of properties. The property in question will be inspected inside and out, with details such as the size and type of the property, the method of construction and the number and layout of the rooms being taken into account.  On the basis of an inspection of this kind, a RICS qualified surveyor will produce an insurance reinstatement and cost assessment which represents a calculation of how much it would cost to rebuild the property if the damage in question is bad enough to make this necessary. The calculation, as well as being based on the details of the property ascertained through a thorough inspection, will include the following factors:

• The cost of any demolition work which is needed to clear the site to enable construction of a new building.
  
• Any professional fees which might be involved with planning, designing and constructing a new building.
  
• Any statutory fees which might apply to the cost of reinstating the property.

If you have a portfolio of properties the inspection for an insurance reinstatement and cost assessment will take place on a building by building process. Once all of the properties have been inspected you will be in a position to negotiate insurance coverage which covers the estimated maximum losses and reinstatement costs without being overly expensive. RICS qualified surveyors from Crown Survey and Valuation will use their expertise in the field combined with many years’ worth of experience to deliver a cost assessment which takes all possible variations and scenarios into account.  

What could happen if you don’t have insurance reinstatement and cost assessments carried out?

You may be tempted to cut corners and save money when shopping around for insurance for your property, but this would be a mistake. If the property in question is under-insured and you need to make a claim, then the company which provides the insurance may invoke what is known as a Condition of Average Clause. This means that the total of the claim in general is reduced to reflect the value of the under-insurance and that you, as the policy holder, will be liable to cover any shortfall.

Once an insurance reinstatement and cost assessment has been carried out the details should be reviewed every 12 months in order to ascertain that the amount in question still reflects the circumstances of the property and the wider market. Some factors which might impact on an insurance reinstatement cost assessment include the following:

• Listed Property – If the property in question is listed then this could increase the cost of reinstatement dramatically.
  
• Location – the location of the property might impact on the cost of reinstatement in terms of the local property market and the value of properties in the area.
  
• The Site – the specifics of the site on which the property is located could impact the reinstatement costs. For example, if access is limited or problematic, the reinstatement costs could rise, while proximity to transport hubs such as roads and railways could cut the reinstatement costs.
  
• The Detail of the Property –  the construction methods used will impact on the reinstatement costs, as will factors such as a particularly complex architectural layout or building techniques/materials. The size of the property will also be a factor. For survey and valuation purposes, the surveyor will use the RICS standard code of practice when noting the measurements for a property. Under this code the Gross Internal Area (GIA) measured is used for a flat, and the Gross External Area (GEA) measured is used for a house. 

If you’re in need of an insurance reinstatement cost assessment for your property and are looking for an RICS Surveyor near you, contact us today for a free quote. We specialise in building surveys and valuations and can carry out a professional inspection, so you can rest assured that the reinstatement costs we arrive at are a realistic reflection of the current value of your property and the cost of dealing with any damage.