Reinstatement Cost Assessments or RCA’s are estimations of the cost of rebuilding property following total destruction and represent the sum that a building should be insured for. Many factors influence reinstatement costs making assessment a highly technical exercise. At Malcolm Hollis we aim to save you time and money by providing all the information you need to apportion costs easily, and can combine this with portfolio management capability to ensure you have accurate and up-to-date costs for all of your properties with the minimum of input from you.
Experience and resources
Our expertise in this service is, of course, underpinned by experience. We can demonstrate experience across all sectors of property of all sizes. We offer particular expertise in portfolio management, a service designed specifically for asset managers needing comprehensive and active management of all RCA needs across the whole portfolio on an ongoing basis.
We have one of the largest independent building surveying teams in the UK with offices strategically located to allow easy access to most areas. This capacity enables us to manage portfolio instructions and provide clients with a single point of contact for multiple cost assessments, delivered quickly, cost-effectively and consistently for any premises throughout the UK and Ireland. The ability and capacity to take on the management of portfolio instructions ensures that rebuilding costs are updated only when necessary, that consistent rates are used, and that an understanding of the portfolio is developed.
Testament to our experience and standing in this area is the fact that we are regularly asked to provide expert evidence in connection with disputes over reinstatement costs.
Understanding
With very few exceptions, commercial and domestic properties need to be insured and, importantly, insured for the correct amount. Every building requires an individual professional assessment to ensure that all of the relevant factors which affect rebuilding costs are given due consideration. For instance, the type, quality and means of construction will need to be considered along with any statutory controls; the assessment must also allow for associated costs such as for demolition, external areas and professional fees. In addition, the geographical location of a building will affect the rebuilding cost as a result of regional variations, as will the nature of its site and immediate surroundings.
Accuracy
Whether a single property or whole portfolio, or for insurer or insured, accuracy in assessing the cost of reinstating a building following destruction is paramount, but is, in our experience, something that is often, worryingly, overlooked. Under-estimating the insured value could result in a shortfall of cover and expose an owner to a considerable financial burden should a claim arise. Over-estimating costs, or unnecessarily including elements of the building that need not be, will be reflected in excessive premiums. To generate the most accurate rebuilding costs possible our own in-house knowledge and research is supplemented by specialist, subscriber-only, on-line information published by the Building Cost Information Service.
Whilst an accurate RCA will pay dividends in terms of ensuring your building is neither over nor under-insured, accuracy is particularly critical where insurance costs (and, incidentally the consultancy costs in producing the RCA’s) are reclaimed from tenants via a service charge. It is essential to demonstrate that the premiums paid, and hence reinstatement cost assessments, have been fair and reasonable and derived from an appropriate and educated assessment. Our RCA’s are succinct, consistent, clear and extremely user friendly, making the asset manager’s task of apportioning costs to each tenant as straightforward and un-time-consuming as possible.
While clearly having an accurate RCA is crucial, building costs, and even buildings themselves, change over time so it is considered good practice to re-assess properties every three years. This avoids the risk of compounding errors and ensures that alterations or any other factors that may affect the reinstatement cost are taken into account and insured values adjusted accordingly. In the intermediate years the assessments can be updated by reviewing economic factors - a desk-top exercise that we offer as a free service to our portfolio RCA clients.
Reinstatement cost assessments products
- Stand alone reinstatement cost assessments
- Portfolio reinstatement cost assessments
- Update reinstatement cost assessments
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