An RCA provides essential information for property owners and occupiers, as it will determine the amount for which a property is insured. If the figure is too high, the insurance premiums will too be unnecessarily high. If too low, the property owner may have to make up the difference between the amount insured for and the actual cost of rebuilding, should a total loss result. In fact, insurers can reject claims altogether if the amount insured for falls badly short of the actual cost of reinstatement in the event of a claim.
An accurate Reinstatement Cost Assessment is also important for insurance claims for repairs. Most insurance policies specify that in the case of undervaluation by more than ten percent, the insurer will not cover the full cost of any repairs. The Association of British Insurers advise that 20% of householders are under-insured and one study has put the figure at as high as 80%.
At EK RCA we work with all types of buildings, from single houses to residential blocks and commercial properties. This means we bring a range of building surveying expertise to bear, rather than looking at RCAs in isolation. Every building is unique, so a good RCA will take into account the peculiarities of the property in question. We base our assessments on careful analysis of each element, rather than using simple indicative tables, which can often result in misleading assessments. There is a particular danger of under-valuation with period buildings and conversions, and we have particular experience of working with Listed Buildings.
We recommend RCAs are reviewed regularly to ensure they are still accurate, taking into account the changing costs of materials and other developments in the building trade. Best practice (the RICS) recommends that a full reassessment is undertaken at least every three years.
We understand that there are particular challenges with period buildings. These are both practical — e.g. older buildings tend to be built from distinctive materials, and the extra cost must be factored in — and legal, as if a building is Listed, the terms of restoration will have to be discussed with the local planning authority. A good RCA will take all of these factors and more into account, and provides a property owner with genuine peace of mind.