Reinstatement Cost Assessments – are you correctly insured

As a Landlord is your building correctly insured?  When did you last have the reinstatement cost of your building assessed?  Was it within the last 3 years?  If the answer is no to the last question then a reinstatement cost assessment may be required.

The Royal Institution of Chartered Surveyors (RICS) recommend that the reinstatement values of all buildings are recalculated every 3 years to ensure they are accurate.  In line with RICS advice the reinstatement costs of a building should be reviewed as a desktop exercise annually to ensure there are no significant changes to the building or the potential reinstatement costs.  In most cases the desktop review prior to renewing the building insurance will confirm that there is little change to the property and placing an index linked uplift on the buildings’ reinstatement figure is appropriate.  If the building has changed and the changes have a potential impact on the reinstatement costs of the property then the reinstatement costs should be recalculated.

Whilst applying an index linked uplift is standard practice the RICS advise that reinstatement costs of every building should be should be recalculated every 3 years to ensure they reflect current costs.  Index linking the reinstatement value year on year can over time distort the reinstatement value so it can lead to the sum insured being inaccurate and not correctly reflecting the true reinstatement value.  This in turn could cause issues in the event an insurance claim is made so it is important to review and carry out reinstatement costs assessments to ensure buildings are suitably insured.

We have experience in undertaking inspections and preparing reinstatement cost assessments on all building types to include commercial properties ranging from small retail units to large office and industrial properties to residential blocks.  We work with our clients to ensure that we provide clear information on what is included in the reinstatement costs allowing our clients to obtain the most appropriate insurance cover for their building.