Building Reinstatement Cost Assessment

Category: Building Surveying Blogs
Author: Dan Metcalf
Date: 03/09/2024

Building Reinstatement Cost Assessment

Don’t be caught short and needlessly overpay!

When insuring a commercial property, obtaining an accurate Building Reinstatement Cost Assessment is crucial. In today’s market, construction costs have soared, and without a precise evaluation, you risk under-insuring your property. This could leave you financially vulnerable in the event of destruction, as your insurance payout may not cover the full cost of rebuilding. Conversely, if your rebuild cost is overestimated, you might be paying excessively high premiums, effectively wasting money on insurance coverage that exceeds what’s necessary. Seeking specialist advice ensures that your reinstatement cost assessment is accurate, reflecting current market conditions and providing optimal insurance coverage. This approach not only protects your investment but also helps you manage costs effectively, ensuring you are neither underinsured nor overpaying.

Ideal Time for a Building Reinstatement Cost Assessment

When should I procure a Building Reinstatement Cost Assessment and how often does it need to be reviewed and updated?

The best time to initiate a Building Reinstatement Cost Assessment is during the due diligence phase, ideally before finalising the purchase of a property. Conducting this assessment early allows you to accurately understand the potential insurance needs of the premises, ensuring that your coverage is adequate from the outset. Additionally, if you're already commissioning a Building Survey, the reinstatement cost assessment can often be performed alongside, potentially reducing costs by combining the two services.

According to RICS guidelines, it's considered best practice to conduct a comprehensive review of the Building Reinstatement Cost Assessment every three years. This review should also be undertaken following any significant alterations or refurbishments to the property, as changes in structure or materials can significantly impact the rebuild cost. To maintain accuracy between these major reviews, an annual update is recommended, which can often be completed as a desktop assessment. This ongoing review process ensures that your insurance coverage remains appropriate, protecting your investment and avoiding the risks associated with underinsurance or overpayment on premiums.

Professionals for Building Reinstatement Cost Assessment

Who can you trust to assess your property’s reinstatement cost?

It would be prudent to appoint a Chartered Building Surveyor and/or a Chartered Quantity Surveyor who has knowledge and experience in the demolition and rebuild of commercial premises. WGM Building Consultancy has expertise in preparing Building Reinstatement Cost Assessments, if you would like to discuss how we can help with your property, please contact our head of building surveying:
Dan Metcalf at: Dan@wgm-bc.co.uk / 07735 233 642.

Corrugated roof with damaged walls and roof needing Building Reinstatement Cost Assessment

Key Points for a Building Reinstatement Cost Assessment

Importance of an accurate assessment:

Ensure your property is insured at the correct level.
Avoid the risks associated with both underinsuring and overinsuring.
Protects against potential financial shortfalls in the event of a claim.
Timing of assessment:

Ideal to start during the due diligence stage before acquiring the property.
Can integrate a Building Reinstatement Cost Assessment with a Building Survey to save costs.
Frequency of review:

Full review recommended every three years.
Should be updated after any major alterations to the property.
Annual updates can be done through desktop reviews.
Specialist advice:

Essential to seek expert input for an accurate and comprehensive Building Reinstatement Cost Assessment.
Helps ensure that you are neither underinsuring nor overpaying on premiums.
Cost control:

Avoids paying excessive insurance premiums by ensuring the rebuild cost is accurately calculated.
Regular updates help maintain the balance between adequate coverage and cost efficiency.

If you are responsible for insuring commercial premises, it is crucial to obtain specialist advice by commissioning a Building Reinstatement Cost Assessment. This ensures that your property is insured at the correct level, providing peace of mind that in the event of damage or destruction, the rebuild costs will be fully covered. Without an accurate assessment, you risk either underinsuring, which could lead to significant financial shortfalls in a claim, or overinsuring, which will mean paying unnecessarily high premiums. By regularly reviewing and updating this assessment, you can strike the right balance, adequately protecting your investment without incurring excessive insurance costs.

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DAN METCALF

Telephone: 07735 233 642

Email: dan@wgm-bc.co.uk

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Building Reinstatement Cost Assessment