Do I need a Reinstatement Cost Assessment?

A building reinstatement cost assessment (RCA) provides an estimate of the cost to rebuild a property for insurance purposes, and is a key component in obtaining building insurance cover. The insurance valuation is undertaken on the basis of total loss, such that total demolition and rebuilding is required.

RICS members and RICS regulated firms prepare the reinstatement cost assessment on the basis of a ‘day one reinstatement’, known as the declared value. The RCA does not include any allowance for inflation during the period of the policy, as this is allowed in the inflation provision of the building insurance policy.

Importance of Declared Value

As no building or location are the same, it is essential that the specific nature of the construction and situational factors that might impact the cost of rebuilding a property are properly considered. We break a building down into its elemental components, from the ground up, to ensure each assessment is bespoke, realistic and mindful of the site-specific constraints that can impact cost to protect your investment.

There is a risk when obtaining a reinstatement cost of property that the rebuild cost or declared value has been underestimated, which can result in a shortfall in the insurance cover and proportion of reinstatement works pad for. One of the risks of over-estimating the reinstatement cost is increased building insurance premiums, which can have an exaggerated effect in an environment of significant inflation of building reinstatement costs and premiums.

UK & European Experience

Lantic Building Surveyors have extensive experience in preparing RICS reinstatement cost assessments ranging from terraced residential accommodation to the largest of retail development schemes exceeding £1.7B.

As well as ad-hoc instructions, we have expertise in managing RCA portfolio instructions for investment managers and institutional investors, both in the UK and across Europe. Our consistent approach to reinstatement cost assessment portfolios ensures a coordinated, timely delivery, with comparative analysis as required to satisfy your internal reporting needs.

RICS Best Practice

Our surveyors were all trained by market leading firms in preparing reinstatement cost assessments, that have been instrumental in developing the RICS Guidance Note Reinstatement Cost Assessment of Buildings, which sets out industry best practice. We build upon this wealth of experience to offer a clear and efficient reporting style, using a range of industry recognized price data and methods to ensure consistency and provide a sound audit trail.