Insurance (or Reinstatement) Valuations

As for most risks there is a range of insurance products for houses & buildings. Standard policies that cover most typical housing stock up to policy limits such as £500,000 are now common but these do not cover old, listed or non-standard construction.

With ever increasing premiums, policy conditions and exclusions, we are being increasingly asked to carry out reinstatement valuations for insurance purposes on larger, higher value properties. Standard rate per metre build costs –which like so many things freely available via the internet – are often not appropriate for these types of buildings, and must be used with care. For example the actual cost of reinstating a period, listed building can be significantly higher.

It is important to include all the structures on the site, including outbuildings, retaining walls, driveways, tennis courts, swimming pools etc. Particular features such as stone facing, period detailing and thatch are typical uplifts, but the potential list is endless.

As the policyholder the onus for providing the correct sum insured may rest with you, and you may therefore wish to obtain professional advice. Total losses are rare but partial losses can result in penalties or application of the ‘average’ clause for underinsurance. So when you receive your renewal document consider how the sum was originally set and if it is still valid, if you have altered or extended the property and if the insurance has been increased to reflect these changes.

Although under-insurance is the primary concern there is also no point in being over insured, and this situation can also arise from time to time.

Please remember that the correct sum insured does not relate to the market value of the property but is the cost of rebuilding to modern standards inclusive of demolition, site clearance and all associated fees.