What is Reinstatement Cost?


Buildings need to be insured for rebuilding purposes! If you’re applying for a mortgage or seeking investment cover for your residential property, the property will need to undergo an insurance reinstatement valuation for rebuilding purposes. In short, the reinstatement cost of the property is a professional calculation that details how much it would cost to rebuild your home to its original condition using the same methods and materials. This may be necessary if the property was destroyed or was in such a state of disrepair that it had to be knocked down.

By carrying out this assessment, you will ensure that you protect your investment. Without it, you could have a severe shortfall in insurance cover. Also, if you have a partial damage claim the insurance company can impose the “ averages Clause “ whereby the payout is in proportion to the amount by which the sum insured is underinsured.

For accuracy, the insurance reinstatement valuation should be carried out by a professional Chartered Surveyor who is registered with the RICS (Royal Institution of Chartered Surveyors website.) They will use the Building Cost Information Service (BCIS ) tables of the Royal Institution of Chartered Surveyors (RICS) to provide their assessment comprehensively and accurately.

 

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How is the reinstatement cost calculated?


The insurance reinstatement costs of the property includes all costs involved in rebuilding your home. It includes materials and labour, reinstalling central heating, double glazing, electrical supply, the cost of clearing the land ready for rebuilding to begin and any professional fees. The calculation isn’t the same as the market value of your home and can depend on many factors such as:

  • Age of the property: older properties and listed buildings may need special techniques to restore a building or to rebuild.
  • Location: where a property is located and whether it’s situated in a conservation area will also affect the value assessment.
  • Geography: the costs of material and labour will be affected if the property is a specific geographical location.
  • Asbestos: if asbestos is present this will need to be removed and replaced.
  • Complexity: if the property is close to a main road or the rebuild requires certain restrictions such as road closures, there may be a fee payable to a local authority.

A full reinstatement cost assessment should be carried out every three years or if the property undergoes significant changes. This ensures that there is sufficient insurance cover on the property. You can find a reinstatement cost valuation on your mortgage valuation if you have recently bought a home. These should be checked to ensure they are not out of date.

How to find out your property reinstatement costs?


Whenever you need an insurance reinstatement valuation you should contact a professional Chartered Surveyor who can provide you with an accurate valuation that you can use to obtain the right insurance cover for your property, pay the right insurance premiums and ensure that you get the proper cover.


Summary of Reinstatement Cost


An insurance reinstatement valuation tells you how much it would cost to rebuild your property if it was destroyed or damaged beyond repair. This value is different from the market value of your home as it considers material, labour and other factors that affect the rebuild. For an accurate, professional assessment, contact a Harding Chartered Surveyors today. Our insurance reinstatement valuations start from £450 by themselves, and we offer a discounted price if included within a survey of a property.

Difference between market value and an insurance reinstatement valuation?


Rebuild cost and market value are two separate calculations that can often be confused.

The market value of your home is based on a variety of factors such as its size, location, quality of the local schools, local employment opportunities and the age and condition of your home. On the other hand, the reinstatement cost focuses solely on how much it would cost to rebuild the property assuming it was a total loss and return it to its former condition.


At Harding Chartered Surveyors, we aim to be direct, open, and honest. As members of the Royal Institution of Chartered Surveyors (RICS), we must abide by strict ethical standards.  We benchmark ourselves against the client feedback we receive. We deal with complex matters but interpret all the jargon for you to give you a common-sense opinion.

Our surveyors are always more than happy to spend time discussing matters with you. 

Our RICS Chartered Surveyors comply with stringent guidelines and use 60 years of combined experience to provide accurate commercial property valuations in London.

Contact our professional and RICS registered valuers to arrange the valuations that will save you time and money, and make the whole procedure smooth and easy.