What is a Reinstatement Cost Assessment?
— 02 August 2022 by Alex Gathern Posted in: Surveying
A Reinstatement Cost Assessment (RCA), also known as a Building Reinstatement Valuation (BRV), is a calculation made by an independent expert that represents the total cost to reinstate your property in the event of it being destroyed. Surprisingly, the market value has no direct bearing on the reinstatement cost. The figure required by insurance underwriters is one that covers a total rebuild, including everything from debris removal to architects’ fees.
Insurance documents will typically list a ‘declared value’ and ‘sum insured’. The surveyor’s assessment determines the ‘declared value’. It considers factors such as the size of the building and location; whether it’s listed and would need specialist materials or techniques to be rebuilt. A percentage increase is then applied to this value, allowing for changes in inflation, to arrive at the sum insured.
Industry research* has revealed an alarming shortfall in cover amongst UK properties, with 9 out of 10 being insured for the wrong amount. The risks associated with this can be costly.
Following a recent instruction, a client advised us that, had they not had an RCA carried out, their property would have been under insured. This could have been disastrous if they had needed to make a claim.
We’ve also carried out an RCA where the insured sum decreased, despite inflation and other factors being taken into account. Often, additional information on the property is gathered, or further investigations are carried out, which can result in the base data for compiling the RCA changing. For example, if the property was originally believed to be timber framed with an external brickwork skin, but upon further investigation was found not to be timber framed, it’s possible that the insured sum would decrease – but so would the insurance premium, which is good news.
The Royal Institution of Chartered Surveyors (RICS) recommends that a Reinstatement Cost Assessment is carried out every 3-5 years by a qualified and experienced surveyor – or sooner if your property has been extended or altered. It involves an inspection of the building to understand the age, accommodation and construction. The surveyor will take measurements and refer to the Building Cost Information Service (BCIS) to calculate the total reinstatement cost.
OA Surveyors have considerable experience in carrying out RCAs for a variety of residential and commercial clients.
Contact us to discuss your requirements and receive a free, no-obligation quotation.
T: 01273 227500 E: hello@oasurveyors.com