The reinstatement cost (also known as rebuild cost or building sum insured) of your home, is the amount it would cost to completely rebuild the property from scratch if it were totally destroyed, by a fire for example. It includes, costs of clearing the site, materials, labour and professional fees.
It is not the same as the value of your home. Reinstatement costs are for an accurate reconstruction of your property whereas market value is simply what the property is worth as a whole finished product.
A reinstatement valuation is the estimated amount for which your home or building should be insured and the cost associated with its reinstatement should the property be destroyed (in a fire, for example). It assumes a total – loss scenario and therefore includes costs of demolition, site clearance, estimates of materials, labour and professional fees.
A reinstatement valuation is required for building insurance applications and is the amount of money for which your home is insured in case of total loss. Having an accurate reinstatement value is vital to both commercial and residential clients to ensure, in the event of a claim, that they are neither under nor over-insured.
In many instances, proper insurance is a specific requirement under the terms of a commercial lease, or a policy that is required by mortgage lenders prior to lending.
Imperium Chartered Surveyors can provide professional advice on the estimated reinstatement costs of your asset for insurance purposes, ensuring the continued protection of your investment. Our valuations use the most up to date data provided by the Royal Institution of Chartered Surveyors Building Cost Information Service.
When insuring your home or building, it is not generally suitable to insure it against its sale price or current market value. A reinstatement valuation should be undertaken to ensure a more accurate valuation for insurance purposes.
Get in touch, and one of the team will be happy to discuss your needs.
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