With Build Costs Rising, Ensure Your Property is Adequately Insured
Monday 11 July 2022
Over the recent past, increased global demand in the construction sector, coupled with the impacts of the pandemic and consequent logistics issues, has resulted in unprecedented shortages, and ultimately, increased prices of materials and labour across the economy.
It is therefore no surprise that recent studies suggest more than 75% of UK properties are currently underinsured. In the event of a claim, the reinstatement cost estimate will be used as a guide for the insurance pay out, and most insurance policies will include an average clause that means you will not be paid out the full cost of reinstating your property if you are under-insured.
Generally speaking, annual adjustments to the reinstatement sum are recommended to reflect inflationary effects, with a re-assessment usually being required every three years, or earlier should significant alterations be undertaken. However, with build costs higher than ever, an up to date Reinstatement Cost Assessment is highly recommendable, in order to ensure property owners are adequately insured.
There are a number of important things to consider when looking at the costs involved of putting your building back together again, and as such, there is no substitute for a professional RCA, which is sometimes referred to as a re-build valuation. In addition to ensuring your property is insured correctly, there are a number of insurers who will agree to waive the average clause for a period of time (often as long as three years) upon the receipt of an RCA.
While a correct re-build sum will save you hassle, time, money and potentially your business, the report may also identify over-insurance and could therefore even produce a reduction in your current insurance spend.
