Insurance Reinstatement Cost Assessments
Accurate reinstatement cost assessments ensuring your commercial property has adequate insurance cover. We identify underinsurance risk and provide defensible valuations for landlords and insurance brokers.
be aware
The Hidden Risk of Underinsurance
Underinsurance remains a significant issue in commercial property and is often only identified when a claim is made. Rising construction costs, labour shortages, supply chain pressures, and changes to building regulations can all increase the cost of reinstatement, leaving insured values outdated if they are not reviewed regularly.
The consequences extend beyond total loss scenarios. The "average clause" in most policies means that even partial claims are proportionally reduced – if you're underinsured by 20%, your £100k claim becomes £80k
Who Needs an RCA?
Tailored Reinstatement Cost Assessments (RCAs) ensure properties are accurately insured, protecting stakeholders from the financial risks of underinsurance. Our services are designed to support both Asset Managers & Landlords managing portfolio-wide risk, and Corporate Insurance Brokers requiring independent verification for premium negotiations.
Typical trigger: Annual insurance renewal, portfolio acquisition, refurbishment or extension works
Typical trigger: Internal risk audit or insurance premium negotiation
When to Commission an RCA
These are some of the scenarios in which commissioning an RCA is required.
Insurance Broker Requirement
- Preventing underinsurance penalties by verifying accurate, up-to-date rebuilding costs.
- Supplying independent, RICS-compliant assessments to support premium negotiations.
- Updating historic or index-linked valuations during annual insurance policy renewals.
- Mitigating professional liability for brokers and financial risk for property owners.
Lender Requirement
- Satisfying mandatory insurance covenants set by banks and financial institutions.
- Supplying the certified valuation reports required during property refinancing.
- Protecting the lender’s financial security by ensuring total rebuild costs are covered.
- Demonstrating proactive risk management and asset protection to funding partners.
Property Acquisition
- Establishing an accurate day-one insurance value before completing a transaction.
- Identifying inherited underinsurance risks hidden within newly acquired portfolios.
- Aligning the new property’s insurance metrics with your broader portfolio standards.
- Protecting investor capital from immediate financial exposure post-purchase.
Significant Construction Works
- Recalculating rebuild costs to include newly constructed extensions and increased floor areas.
- Accounting for the replacement cost of premium materials, structural upgrades, or new plant machinery.
- Adjusting cover to reflect modern building regulations and current compliance costs.
- Ensuring a seamless transition from contractors’ site insurance to standard property cover.
process
Our RCA Methodology
Providing comprehensive dilapidations support across the entire lease lifecycle, offering strategic advice before commitment, during occupation, and at exit planning.
- Desk-top review of property and initial analysis of documentation
- Site inspection and measurement verification
- Analysis of construction type, age, and specification of buildings on an elemental basis
- Assessment of external works, ancillary structures, and site infrastructure
- Assessment of demolition and site clearance costs
- Calculation of elemental rebuild costs using current BCIS and published industry rates
- Allowance for professional fees and statutory compliance
- Consideration of site-specific factors (access, surrounding structures, phasing)
Recent Findings
30Underinsurance level in properties not reassessed in 5+ years
3Recommended maximum interval between RCA updates
Frequently Asked Questions
An RCA estimates the full cost to rebuild a property in the event of total loss, including demolition, professional fees, and compliance with current building regulations. It's used to set appropriate insurance cover.
We recommend updating RCAs every 3 years, or sooner if there have been significant changes to the property, construction cost inflation, or regulatory requirements.
Underinsurance can trigger the "average clause" in insurance policies, meaning all claims (not just total loss) are proportionally reduced. Even partial claims are affected.
Yes, all our RCAs are prepared in accordance with BCIS Reinstatement Cost Assessment methodology and are suitable for insurance and broker requirements.