Ensure you’re correctly insured.
Given the current inflationary climate, particularly around construction costs, it is increasingly important to ensure that your properties are insured for the right amount. Too little and you risk being under-insured in the event of a claim. Too much and you pay unnecessarily high premiums.
Insurers are increasingly demanding up-to-date, precise assessments of your portfolio’s rebuild costs and insurance obligations. As policy terms tighten and costs increase, it’s critical to have current, reliable reinstatement cost assessments (RCAs). Our robust, tailored approach to RCAs delivers the accuracy you need to guarantee credibility under examination. In 2023 we inspected 8.9 million m2 of properties with a total value of £8.3 billion.
What we do
Every property is unique, from a Grade I listed building to a complex hospital facility, so it’s essential to capture all the factors impacting its reinstatement cost. Leveraging our expertise and experience, we’ll guide you on the optimal methodology to ensuring you receive a robust Reinstatement Cost Assessments.
Tailored Methodology
When it comes to complex, bespoke or large property portfolios it is important a robust but pragmatic approach is used. Our Building Surveyors apply best practice methodology, balancing methods, such as detailed site inspections and desk reviews, and different building uses to guarantee your valuations withstand rigorous examination.
Robust Data
We ground our strategy in comprehensive data collection and acute commercial insights. Using a strategic understanding of market nuances, we leverage RICS standards and data insights to refine our assessments. This vigilance provides reinstatement cost assessments that accurately reflect and protect the value of your property portfolio for insurance purposes.
Commercial Context
Drawing on our comprehensive experience and insight from the wider project management, lease and valuation consultancy, we ensure your reinstatement cost assessments align with the precise expectations of insurance brokers and companies.
The Problem of Inaccurate Insurance Cover
Underinsurance occurs when a property is insured for less than its replacement cost or actual value, leading to various risks and potential financial losses for property owners. Over insurance wastes premium that could better be spent elsewhere in a business.
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1. Inadequate Coverage
If a property is underinsured, the insurance payout may not be sufficient to cover the full cost of repairs or replacement in the event of damage or loss. This can result in significant out-of-pocket expenses for the owner.
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2. Coinsurance Penalties
Many insurance policies include a coinsurance clause that requires property owners to insure a certain percentage of the property’s value (typically 80-90%). If the property is underinsured, the owner may face penalties, reducing the amount of the payout proportionally.
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3. Legal Issues
Some lending agreements require adequate insurance coverage. Failing to comply with these requirements can result in legal issues or even foreclosure if the lender deems the property underinsured.
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4. Financial Strain
In the event of a major loss, the financial burden of covering the difference between the insurance payout and the actual costs can place significant financial strain on the property stakeholders’ and affect business operations.
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5. Business Interruption
For commercial properties, underinsurance can result in insufficient funds to cover business interruption losses. This can disrupt operations and result in lost revenue during the period of restoration.
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6. Loss of Investment
For real estate investors, underinsurance can jeopardize the return on investment. The inability to fully restore a damaged property can lead to lost rental income, decreased property value, and overall financial loss.
Case Studies
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Basingstoke and Deane Borough Council
Basingstoke and Deane Council (BDC) own a large and diverse portfolio of buildings both within Basingstoke town and the wider area.
The portfolio of circa 100 properties included Listed buildings, industrial units, high street retail, office accommodation, community centres and shopping mall.
Our early due diligence when reviewing the information provided discovered many discrepancies. This presented an additional challenge for this project, resulting in reviewing and updating data provided to ensure the correct Gross Internal Areas (GIA’s) were applied for the assessments. -
University of Edinburgh
The portfolio comprised 500 properties occupied as educational use, commercial space, sports pitches and student accommodation and spread across eleven campuses with a circa area of 920,000 m2. The portfolio includes 30 Grade A (English equivalent Grade I) buildings, including The University of Edinburgh’s Old College, which dates back to the mid-16th Century. A further 76 Grade B (English equivalent Grade II) buildings were included in the assessment.
The challenge for this project was to inspect and deliver the assessment within six months. -
Bank of England
The Bank of England’s operational estate comprises three uniquely different sites, each with their own complexities and constraints.
The estate includes the Bank’s headquarters in the City of London, the original parts of which were designed by Sir John Soane, and which is Grade 1 listed, and the printing works in Essex constructed in 1950, and which include a barrel-vaulted roof designed by Ove Arup.
The estate also includes a sports ground with extensive recreational facilities in Roehampton.
The challenge for this instruction was security element of carrying out inspections in sensitive areas. -
King's College | Cambridge
The college is enriched in history and was founded in 1441 by Henry VI.
The assessment included a mixture of educational use, encompassing commercial space, a sports centre, religious space, a library and student accommodation. The site sits astride the River Cam enclosed by decorative stone boundaries with historical architectural features. The main campus comprises a mixture of Grade I and Grade II properties.
The challenge for this instruction was assessing the cost of reinstating ornate stone features.
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