You have to insure buildings in respect of rebuilding them. Applying for a mortgage or looking for insurance on your residential property? Then an insurance reinstatement valuation for rebuilding purposes will be required on the property.
In summary, calculating the rebuild cost of your property is a specialist computation that tells you how much it would cost to rebuild your home back to its original condition using the same methods and materials. This may be required if the property will ever be accidentally destroyed or was in such a state of disrepair that it had to be demolished.
By conducting this assessment you will be ensuring that you protect your investment. Otherwise, you could suffer a severe shortfall in insurance cover. For example, if you have a partial damage claim, the insurance company can impose the “averages clause ” whereby the payout is proportionate to the amount by which the sum insured is underinsured.
To make sure the accuracy of the insurance reinstatement valuation, it should be reviewed by a professional Chartered Surveyor who is a RICS (Royal Institution of Chartered Surveyors) registered. Their valuation should be assessed with a complete and precise explanation by using the Building Cost Information Service (BCIS) tables of RICS.
All property insurance replacement costs are costs associated with the repair or replacement of your home. This includes materials and labour, reinstalling central heating, double glazing, electrical supply, cleaning the land needed to start repairs, professional fees – it’s not the same calculation as your home’s market value and can be affected by many factors:
A complete reinstatement cost evaluation should be performed every 3 years or if there are significant changes to the property. This will guarantee that the property is adequately insured. If you have just bought a home, you will find a reinstatement cost on your mortgage valuation. These ought to be assessed to guarantee they are not outdated.
The calculation of the rebuild cost and the market value of your home are separate and independent; however, they often overlap and are mistakenly recognised as the one same calculation.
The market value of your home is calculated by a varying amount of factors including but not limited to the size of your property, where it is located, the quality of the school district and local employment opportunities, as well as the age and condition of your home.
However, the reinstatement cost is strictly focused on the cost of replacing the entire structure in the event of a total loss and returning it to the condition it was in prior to the loss.
