BCIS Insurance Reinstatement Cost AssessmentInsurance Valuations
What is a Reinstatement Cost Assessment?
A reinstatement cost estimate is an insurance valuation of a property. The sum insured under a buildings insurance policy must be the full rebuilding cost of the property, this is the amount of money for which your property is covered.
What are Reinstatement Costs?
Getting a property insured properly not only allows you to get a mortgage against its value, but also protects your investment. If anything were to happen to the property, you would want to be protected financially from the costs. There are many things that surveyors take into account when inspecting a home to create a valuation for insurance purposes. One of these is the building’s reinstatement costs.
What do Reinstatement Costs cover and how are they calculated?
The reinstatement cost of your home is how much it would cost to completely rebuild the property if it were totally destroyed, for example by a fire. It is not the same as the value of your home, and covers the cost of materials and labour. Reinstatement costs are for an accurate reconstruction of your property. They take into account the cost of finding the same materials, where possible, as were used in the original property and of undertaking the same or similar construction methods when rebuilding.
Reinstatement costs also take into account the cost of clearing the land ready for rebuilding to begin and reinstalling facilities such as central heating and double glazing.
Why do I need to know the Reinstatement Costs of my home?
It is important to find out how much your home would cost to rebuild, so that you can get the proper amount of insurance. The last thing you want to happen is for your home to be under insured, and to only find this out when you have to make a claim. Your insurers will only pay out their portion of the costs. The Telegraph newspaper illustrates this well, if you home is worth £100,000 and you have it insured for £75,000, there is a fire or flood and your home suffers £50,000 worth of damage, then you will only receive £37,500 from your insurers (source: The Telegraph).
Any type of works/alterations could also affect the reinstatement cost, it is therefore important that owners undertake reinstatement assessments on a regular basis to prevent issues with under insurance.
How can I find out how much a property’s Reinstatement Costs will be?
To find out how much a potential property’s reinstatement costs will be, you should use a qualified surveyor. You will get an accurate valuation that your insurance company can use to determine the amount of cover you receive and the premiums that you pay. This keeps you financially protected in the future from any serious accidents that could damage or destroy your home.
Contact Wyvern Surveyors to find out your property’s reinstatement costs. Our insurance valuations aim to strike the balance between providing enough cover, without over-valuing and ensuring that you're not paying over the odds on your premium.