Video Transcript

The vast majority of lenders require insurance reinstatement cost assessment to be included in their valuations for secured lending. Effectively, this is the cost to rebuild a like for like replacement of the property or reinstate the property to its condition at the date of valuation. Valuers will refer to BCIS which is the build cost information service, and it provides a huge amount of data from building costs and rates for a whole range of property types across the UK. Valuers will then adopt a rate per square foot and apply this to the building in question.

Insurance reinstatement costs are not available for certain properties.

They’ll also make allowances for additional items like site clearance and VAT. It isn’t wholly scientific and is generally for guidance only. And if an accurate assessment is required then a building surveyor should be consulted. It’s also useful to note that insurance reinstatement costs are not available for certain types of properties like flats within a block for example, as the property will be insured through the block policy, arranged by the landlord or the managing agent. Valuers may also decline to provide an assessment of listed or specialist buildings as they can be constructed using non-standard techniques or materials and again are likely to require the input of a building surveyor.