Ensuring your property is adequately insured is of paramount importance for home owners.
Grillo LLP – Chartered Surveyors are often asked to undertake Reinstatement Cost
Assessments of residential and commercial properties of all types but what should be insured
and for how much?
When arranging property insurance it is important to have advice from an insurance specialist
and professional valuer, who has experience of insurance valuations.
The Reinstatement Cost is how much it would cost to completely rebuild the property if it
were totally destroyed. The cost is calculated using the same materials and same construction
methods of the original property. This is particularly important with Historical and Listed
properties which often have traditional features that would be expensive to replace such as
ancient oak framing, stonework, oak panelling, decorative ceilings and joinery and need to be
assessed by professionals who are familiar with this type of work.
If your property is under insured, you may be liable for the shortfall of any claim, if your
property is over insured, the premiums you pay will be too high.
Recommendations from the RICS are that the base sum be re-assessed by the way of a
desktop update on an annual basis, with a major review undertaken every third year (subject
to be undertaken by the original Surveyor). A full assessment also needs to be prepared in the
event of substantial alterations being undertaken to the property.
Outbuildings, swimming pools, tennis courts, walls and driveways can also be included in
the building sum insured but this depends upon the terms of your particular insurance policy
and the level of cover you have.
Most insurance policies will include a Condition of Average Clause, which means, if your
property is under insured, the amount paid out is related proportionally to the value of the
under insurance. For example:
Sum Insured: £250,000
True Insured Amount: £500,000
Amount Paid: £125,000
(50% Under Insured = 50% of Sum Paid Out)
Grillo LLP – Chartered Surveyors have a team of RICS Registered Valuers and Building
Surveyors, who have extensive experience of Reinstatement Cost Assessment (RCA) of
residential and commercial buildings of all types and sizes including Historic and Listed
Buildings across Surrey, Sussex, Hampshire and South West London. If you would like to discuss the Reinstatement Cost of your property please do not hesitate to contact us on 01483 860600 or firstname.lastname@example.org.
Regulated by RICS