Reinstatement Cost Assessment London

A reinstatement cost assessment (RCA) is a professional estimate of the cost of rebuilding a property after a total loss, for insurance purposes. It covers demolition and site clearance, rebuilding to current building regulations, professional fees, statutory charges and VAT where applicable, plus an allowance for inflation. It is the figure your buildings insurance sum insured should be based on, and it is different from market value or any mortgage figure.

No. Market value is what a property might sell for, driven by location and the property market. Reinstatement cost is the estimated cost of physically rebuilding the property after total loss, including demolition, clearance, professional fees, statutory costs and VAT where applicable. The two can be very different, particularly in London, and insuring on a market-value basis is the most common cause of under-insurance.

Freeholders, resident management companies, right to manage companies, managing agents, housing associations, commercial owners and portfolio owners all need RCAs to set or check buildings insurance sums insured. They are typically instructed at insurance renewal, after the declared value has not been reviewed for some years, or after the building has been extended, refurbished or altered.

The Day One reinstatement value is the estimated rebuild cost at the start of the policy period. Many insurers then apply an inflation provision on top of the Day One figure to allow for cost increases and the time taken to rebuild after a claim. We set out the Day One figure clearly and explain the basis for any inflation allowance so the declared value can be set correctly.

The declared value is the policyholder's assessment of the full reinstatement cost at the start of the policy period, on which the sum insured is based. It is not always the same as the sum insured, which may include an inflation uplift. An RCA gives an evidenced basis for the declared value so it can be defended at renewal and in the event of a claim.

Yes. If the sum insured is materially below the true reinstatement cost, insurers can apply an "average" clause and reduce the claim payment proportionately, even for a partial loss. For a block this can leave leaseholders significantly exposed. A current, evidenced RCA is the most effective protection against under-insurance and average.

As a general guide the reinstatement figure should be reviewed at least every few years, and reassessed sooner after extension, refurbishment, alteration or significant construction cost movement. The exact cycle depends on the building and policy requirements. We agree a review cycle so the declared value does not silently drift out of date between full assessments.

Yes. For managed blocks, keeping the RCA current is part of prudent block insurance management and helps demonstrate to leaseholders that the sum insured is properly evidenced. We can work to a portfolio review cycle so renewals are supported with up-to-date figures rather than rolled-forward estimates.

Yes. Residential blocks are a core focus. We inspect the building and review measurements, construction, communal areas, plant rooms, lifts, roofs, basements and external works, and produce a whole-building reinstatement figure suited to block insurance renewal for freeholders, RMCs, RTM companies and managing agents.

Yes. Reinstatement cost assessments can be prepared for houses, flats, mansion blocks, converted houses, residential blocks and mixed-use buildings, subject to the agreed scope. For mixed-use we assess the whole building, including the residential and commercial elements and shared structures.

Yes, where relevant. The assessment includes professional fees, statutory charges, demolition and site clearance, and VAT on the elements where it applies, alongside the rebuild cost. The assumptions and the VAT position are clearly stated in the report so the figure can be understood and relied on at renewal.

No. A mortgage valuation assesses value for lending and a market valuation assesses sale value. A reinstatement cost assessment estimates the cost of rebuilding for insurance. They are different exercises for different purposes, and an RCA should not be used as, or in place of, a market or mortgage valuation.

Yes. We can assess multiple properties across a portfolio for managing agents, housing associations and institutional owners, and align them to a review cycle so insurance renewals across the portfolio are supported with current, consistent figures.

Yes. Where the building has abnormal features, listed or heritage constraints, difficult access or unusual construction that may affect rebuild cost, those factors are identified and explained in the report, along with the assumptions and exclusions, so the figure is transparent rather than a single unexplained number.

Between full professional assessments the reinstatement figure is usually kept current through index-linking, where the insurer adjusts the sum insured in line with a construction cost index at each renewal. Index-linking helps offset general building cost inflation, but it does not capture changes to the building itself, such as an extension, refurbishment or altered specification. RICS good practice is therefore to obtain a fresh professional assessment periodically, with a figure commonly cited around every three years, and to rely on index-linking only in the years between full reviews.

It depends on the building and the purpose of the figure. For most properties, particularly blocks, period buildings and anything altered or non-standard, a site inspection gives the most reliable basis, because measurements, construction and access constraints can be checked directly, and a full assessment to RICS practice normally involves a site visit. A desktop review, drawing on existing drawings, floor areas and reliable recent records, can sometimes suit an interim update between full assessments. We advise which basis suits your building, and set out clearly in the report what was inspected and what was assumed.