Buildings Valuations

Many properties are insured for their market value, but this can be very risky.

The reinstatement value and market value can, and generally do, vary significantly. The reinstatement value includes the demolition and rebuilding costs for a property, whereas the market value represents what the owner might get if they sold it.

Aston Lark always recommends that you use a registered Royal Institute of Chartered Surveyors (RICS) surveyor to provide you with a full reinstatement assessment.

Under/over insurance

A reinstatement cost assessment significantly reduces the risk of underinsurance and resultant financial penalty. If your property is incorrectly insured, you may be left seriously out of pocket in the event of a claim.

Where a building is underinsured, an insurer may apply ‘average’ in the event of a loss. This means that if the building is only insured for 60% of its correct reinstatement value, then the insurer will only pay out 60% of the claim – even if the total claim is less than the sum insured. In extreme cases of underinsurance, the insurer may deem this to be reckless and cancel the policy or refuse to pay any of the claim.

At the other end of the scale, overinsurance is the equivalent of throwing money away.

Residential rebuild evaluations 

For advice on how to calculate the rebuild value for a residential property, please click here.