Insurers increasingly want up-to-date, precise assessments of a portfolio’s rebuild costs and insurance obligations. As policy terms tighten and costs increase, it is critical to have current, reliable reinstatement cost assessments (RCAs).
Our robust, tailored approach to RCAs delivers the necessary accuracy to guarantee credibility under examination. In 2023 our UK team inspected 8.9 million m2 of properties with a total value of £8.3 billion.
Tailored Data-driven Valuation
Every property is unique, from a Grade I listed building to a complex hospital facility, making it essential to capture all the factors impacting a reinstatement cost. Leveraging our expertise and experience, we guide our clients towards the optimal methodology to ensure robust Reinstatement Cost Assessments.
On complex, bespoke or large property portfolios we take a robust yet pragmatic approach. Balancing detailed site inspections and desk reviews, our Building Surveyors apply best practices while considering the different building uses to create valuations that withstand rigorous examination.
We ground our strategy in comprehensive data collection and acute commercial insights. Using a strategic understanding of market nuances, we leverage RICS standards and data insights to refine our assessments. This vigilance provides reinstatement cost assessments that accurately reflect and protect the value of your property portfolio for insurance purposes.
Finally, we draw on experience and insight from our colleagues in project management, lease and valuation consultancy, ensuring reinstatement cost assessments align with the precise expectations of insurance brokers and companies.
Navigating Insurance
Under-insurance occurs when a property is insured for less than its replacement cost or actual value. If a property is underinsured, the insurance payout may be insufficient to cover the full cost of repairs or replacement in the event of damage or loss.
Many insurance policies include a coinsurance clause that requires property owners insure a certain percentage of a property’s value (typically 80-90%). Owners of underinsured properties may face penalties, resulting in reduced payouts.
Some lending agreements require adequate insurance coverage and failing to comply with these requirements can result in legal issues or even foreclosure if the lender deems the property underinsured.
In the event of a major loss, the financial burden of covering the difference between the insurance payout and the actual costs can place significant financial strain on the property stakeholders’ and affect business operations.
For commercial properties, underinsurance can result in insufficient funds to cover business interruption losses and lead to disrupted operations and associated losses in revenue during the period of restoration.
Finally, underinsurance can jeopardize returns on investment, with the inability to fully restore a damaged property resulting in lost rental income, decreased property value, and overall financial loss while over-insurance wastes premiums better spent elsewhere.
