As a property owner, whether that be commercial or residential, being aware of the consequences of under-insuring your property is vital to ensure your assets are fully protected in the event of a fire, flood, or other catastrophic events that result in total loss.

Building reinstatement valuations are an assessment of the building assessment costs for insurance purposes and refer to covering the cost of demolition, reconstruction and legal fees to avoid any shortfall. Regardless of whether your property is residential or commercial, you must have the correct insurance cover for your property and its contents.

Almost three years since the first Covid-19 lockdown, the construction industry is still feeling the effects as well as the wider impact of the pandemic on the economy today. Construction products and materials increased between 10-15% last year, and a new report reveals that the rising cost of materials will be the biggest challenge in 2023. 

As the cost of building materials and labour have risen significantly it is more important now than ever to ensure you are fully protected as undervalued properties may result in insurers not paying out the correct amount in the event of a claim. The latest Building Materials and Components Statistics showed that on average annual building materials prices for 2022 were 54.5% higher than in 2015, without including labour. 

The Royal Institution of Chartered Surveyors (RICS) recommends that full building reinstatement cost assessments are carried out every three years, however, with the rise in the cost of living, maintaining an accurate building reinstatement annually is becoming increasingly common.

Property owners may find themselves underinsured due to the rise of construction costs within the industry. Being underinsured means that insurers can reduce payouts proportionately if the sum insured is less than the actual cost of reinstating the building. 

As experts in building reinstatement valuations, we would recommend a review of the insured reinstatement value on an annual basis to avoid paying too much on premiums or too little, which could leave you underinsured and exposed to unnecessary risk. 

To give you peace of mind in knowing that you will be able to fully reinstate your assets, get in touch with us here.