A reinstatement cost assessment is a detailed and calculated estimate of cost to rebuild a property based on total loss, where demolition and rebuilding is necessary. The reinstatement cost assessment should follow the RICS standard of excellence.
Any property owner, investor or occupier should ensure they have a reinstatement cost assessment for all their residential and commercial properties.
What should a reinstatement cost assessment include?
A reinstatement cost assessment should include the cost for any demolitions works, site clearance, topographic surveys (or land survey as they are also known).
It should consider the age of the property, the amount of accommodation, its construction, and measurements and the reinstatement cost should be calculated in line with the RICS Industry Standards.
The reinstatement cost assessment should also have any inflation factors applied.
Why do I need a Reinstatement Cost Assessment?
It is important to have a reinstatement cost assessment for insurance purposes.
If the rebuild figure given to your insurer is massively over estimated, this will result in higher premiums for your buildings insurance, causing unnecessary costs.
On the reverse of this, a property that is inadequately insured due to an incorrect figure being given to your insurance company for the reinstatement cost, means you will not be fully compensated for your losses and unable to rebuild the property without paying for this yourself.
Some property owners have had the same buildings insurance policy in place for several years, it is important to apply any inflation factors to ensure the reinstatement cost assessment is not out of date.
How often should a reinstatement cost assessment be carried out?
To ensure you are insured properly, a periodical reinstatement cost assessment should be carried out every 3 years as a minimum term. However, if the property has been altered in any way, such as having an extension or a refurbishment, then you should look to get a new reinstatement cost assessment carried out straight away and inform your insurance company of its results.
Mace Davies Reinstatement Cost Assessments
At Mace Davies we believe that providing an accurate reinstatement cost is critical when ensuring that a property is adequately insured.
Our RCA’s are calculated on an element by element basis to ensure accuracy. The cost advises the client on the cost of demolition, professional fee’s, statutory undertakings and the rebuild cost. Our RCA’s also consider the day one factor.
Like The RICS, we recommend that a full Reinstatement Cost Assessment be carried out every three years with desktop studies being undertaken every year.
For all your domestic and commercial surveying needs or queries contact Chris at Mace Davies.