Reinstatement Cost Assessments 

Overview

Property valuations for insurance purposes are not the same as the selling price or capital value – the reinstatement cost needs to reflect the replacement cost of the asset as well as inflation to arrive at an appropriate ‘declared value’. It is essential that these assessments are kept up to date – if the figures have not been reviewed for several years, or if there have been any significant changes to the property since the previous assessment, the organisation could be seriously over or underinsured. ​
​ The Royal Institute of Chartered Surveyors (RICS) recommends a full onsite RCA is carried out every three years with costs updated each year based on inflation. Indeed, high levels of general inflation in recent years, combined with labour market and supply chain issues, has put significant upward pressure on building costs and it is therefore even more crucial to ensure reinstatement costs are accurate.