Properties need insurance for rebuilding scenarios. Your mortgage provider therefore requires a reinstatement valuation, so be sure to organise one.
Insurance Reinstatement
Overestimating the value of your property can lead to unnecessarily high insurance premiums, which is especially impactful for clients managing medium to large property portfolios or residential blocks.
Conversely, underestimating the value of your property puts you at risk of insurance companies limiting or denying claims, potentially leaving you in a precarious financial situation after significant damage. Under-insurance may arise when:
- surveying/legal advice is not sought at the policy's initiation;
- alterations or refurbishments have not been considered; or
- a policy lacks an (accurate) inflation factor.
For property owners or those responsible for insuring residential blocks, our panel of valuers can assist by providing an Insurance Reinstatement Valuation. This calculation determines the cost to reinstate a property in the unlikely event of destruction.
Frequently asked questions
How is reinstatement valuation calculated?
This includes all costs involved in rebuilding the property, such as site clearance, labour and materials, services, professional fees, etc. Factors include age of the property, location and geography, hazardous materials (e.g. asbestos) and other complex matters (e.g. road closures).
How often do they need to be carried out?
It is advisable to update the Reinstatement Cost Assessment every 3 years, perhaps more frequently if there have been alterations or refurbishments (e.g. extensions). Regular professional assessments, involving building inspections, measurements, and calculations based on industry standards, are therefore crucial to accurately determining the appropriate insurance sum.