What it is
A reinstatement cost assessment estimates the cost of rebuilding a property from the ground up, the figure your buildings insurance “sum insured” should reflect. It is not the market value, and it is not what you paid.
What it includes
- The cost of rebuilding to current standards and building regulations.
- Demolition and site clearance.
- Professional fees and associated costs.
The risk of under-insurance
If the sum insured is too low, you are under-insured, and many policies apply “average”, scaling down any claim (even a partial one) in proportion to the shortfall. A property comfortably worth more than its rebuild cost can still be badly under-insured if the sum insured was simply guessed.
When to reassess
Rebuild costs change over time and after alterations. It is good practice to have a professional assessment periodically, and after any significant extension or improvement, so your cover keeps pace with reality.