When you insure a building, the figure your premium is based on isn’t the market value — it’s the rebuild cost, also called the reinstatement cost. Get that figure wrong and you can be left badly exposed at exactly the wrong moment. A reinstatement cost assessment gets it right.
Rebuild cost is not market value
This trips a lot of people up. The market value is what a property would sell for; the rebuild cost is what it would cost to physically reconstruct it if it were destroyed — including demolition, debris removal, professional fees and the work itself. For some properties the rebuild cost is lower than market value; for others — particularly older, traditionally built or listed buildings — it can be considerably higher.
The risk of getting it wrong
Under-insure and you may not receive enough to rebuild after a serious loss. Worse, many policies apply “average”, meaning if you’ve insured for less than the true rebuild cost, the insurer can scale down even a partial claim proportionally. A small fire could leave you significantly out of pocket.
Over-insure and you’re simply paying more premium than you need to, year after year.
What an assessment involves
A reinstatement cost assessment is a professional calculation of the true rebuild cost, taking account of the building’s size, construction, materials, location, and any features — period detail, listed status, difficult access — that affect the cost of rebuilding faithfully. It gives you a figure you can insure with confidence, and it’s worth reviewing periodically as building costs change.
This matters especially for the older and traditionally built properties common across our area, where standard online calculators often fall well short. We carry out reinstatement cost assessments across Bath, the Cotswolds and Gloucestershire — get in touch if you’d like to make sure your building is insured for the right amount.
