Building Insurance Valuation

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Insurance Valuation (Reinstatement Cost Assessment) Delivered by RICS qualified Surveyors

Building Insurance valuation, also known as reinstatement cost, rebuilding cost, or reconstruction cost assessment, is a professional evaluation of the costs associated with demolition and reconstruction of an asset in case of total loss, complete destruction or extensive damage from a catastrophic event like a fire.
Reinstatement Cost Assessment requires attention to detail during on-site and off-site evaluations because incorrect assessments can have significant financial consequences.

Our team of RICS Approved Surveyors offers expert advice on the estimated reinstatement costs of your asset for insurance purposes, ensuring the continued protection of your investment.

Our services include on-site inspections, measurements, and assessments of replacement costs for buildings, which account for demolition, site clearance, and professional fees. Our reinstatement insurance valuations are conducted in compliance with RICS guidelines.

The value of land is influenced by various factors such as location, size, zoning, topography, accessibility, environmental concerns, and other relevant features. In order to determine the value of a piece of land, appraisers use different methods such as comparable sales analysis, cost approach, and income approach.

Reinstatement Cost assessment for a building can provide several benefits, including: Proper due diligence and a thorough understanding of these factors are necessary to accurately determine the value of a leasehold property. As such, it is often recommended to seek the expertise of a qualified valuer who is experienced in leasehold valuation.

Peace of mind: The Reinstatement Cost assessment is typically used to determine the appropriate amount of coverage for the property. If the property is underinsured, the owner may not receive the full cost of reinstatement in the event of a catastrophic event. If the property is over insured, the owner may be paying excessive premiums.
Cost savings: By having an accurate Reinstatement Cost assessment, the owner can avoid paying excessive insurance premiums for over-insurance. This can help save costs in the long run.
Investment protection: A Reinstatement Cost assessment helps protect the owner’s investment in the building by ensuring that they are adequately covered in case of a catastrophic event.

Basis of Reinstatement Cost assessment

The basis of Reinstatement Cost assessment by RICS (Royal Institution of Chartered Surveyors) is to estimate the cost of rebuilding a property to its original condition, including allowances for demolition, site clearance, and professional fees, in the event of complete destruction or damage. The assessment is based on the current market rates for labor, materials, and other costs that would be required to rebuild the property to its previous state. The purpose of the assessment is to provide an accurate valuation of the cost of reinstatement for insurance purposes, so that the owner is adequately covered in case of a catastrophic event.

Insurance Valuations vs Market Valuations

Market Value and Reinstatement Cost assessment are two different types of valuations, they serve different purposes and are based on different factors, so they should be considered independently when determining a property’s value.
The Market Value is generally not used for insurance purposes because it does not take into account the cost of rebuilding the property in the event of complete destruction or damage.