The reinstatement value is the total cost of rebuilding the property to its original state, including:
Shire Surveys are a specialist firm chartered surveyor experienced in conducting reinstatement valuations. This valuation considers the specific details of the property, including:
Construction type and materials: Brick, timber, or steel-framed buildings may have different rebuilding costs.
Size of the property: Rebuilding costs are often calculated on a cost per square metre basis.
Architectural features: Properties with special features, such as period architecture or bespoke elements, may require more expensive materials and craftsmanship.
Location: Labour and material costs can vary by location, affecting the rebuilding cost.
A professional reinstatement valuation ensures that the insured amount accurately reflects the cost of rebuilding the property. This avoids both underinsurance (where the payout may be insufficient to cover rebuilding costs) and over insurance (where you’re paying unnecessarily high premiums).
At the time of purchasing insurance: Most property owners get a reinstatement valuation to ensure they are adequately covered.
Periodic reviews: Building costs and regulations change over time, so it’s a good idea to review the reinstatement value every 3–5 years, or after major renovations or changes to the property.
Current Construction Costs: Labour and materials based on current prices.
Building Regulations Compliance: If regulations have changed since the property was built, the valuation accounts for the need to meet new standards.
Professional Fees: Fees for architects, surveyors, and other professionals needed for the rebuild.
Demolition and Clearance Costs: Removing debris and preparing the site for rebuilding.
Other Factors: This could include unique construction materials, historic listing status, or hard-to-replace architectural features.
The reinstatement value focuses solely on the cost to rebuild the property. It does not include the land value or other factors that might affect the property’s market value. As a result, the reinstatement value is often lower than the market value, especially in areas where land is expensive.
Many insurance policies are index-linked, meaning they adjust the insured value in line with inflation and construction cost indices. This helps keep the reinstatement value up to date without needing a new survey every year. We have been involved in very disturbing cases where because of inaccurate valuations some time ago and rapidly increasing build costs the sum insured was not considered sufficient following a terrible house fire, resulting in the insurance company refusing to pay out a claim.
In summary, the reinstatement valuation ensures that your property insurance covers the full cost of rebuilding the property in the event of total loss. It is vital to get this right to avoid being under- or over-insured. For large or unique properties, a professional surveyor should conduct the valuation to ensure accuracy.
Please speak to one of our team for a quotation for an up-to-date valuation which will provide you with peace of mind.
