Reinstatement Cost Assessment (RCA)

reinstatement cost assessment overview

If you are a Landlord or a Tenant who is responsible for insuring the property, whether that be a single building or a portfolio, it is important that the correct level of insurance cover is in place. An accurate RCA will ensure that you are not under-insured, and alternatively that you are not over insured, which may result in higher insurance premiums.

A Reinstatement Cost Assessment (sometimes known as the Building or Fire Insurance Valuation) is an assessment to determine how much it would cost to re-build a property, should it be destroyed by fire or collapse. The cost that is generated allows either the Landlord or Tenant to ensure that the building is insured for the correct amount.

The RCA is prepared following an inspection at the property to review the condition, construction and size of the property. Once this has been obtained, then costs can be obtained from BCIS, previous tender costs or other sources, to achieve an accurate cost for the re-building in the event of the destruction of the building.

In addition to obtaining and establishing the build cost, the Surveyor will also need to review other items such as demolition costs, professional fees, Statutory Authority fees, issues or risks relating to the specific site. All of these issues may have an impact with regards to the insurance cost.

An RCA should be undertaken at least once every three years and this can be supported by annual desktop assessments, ensuring that the prices are kept up to date with changes within tender costs. It may be necessary to undertake a more regular assessment of the building if it has been changed or extended.

The market value of a property is the figure of how much it is worth on the market. The reinstatement value will establish and take into account, the additional costs involved in restoring the property should it be destroyed.