A reinstatement valuation reflects what it would cost to demolish and rebuild a damaged property on a like-for-like basis, taking into account everything from carting away the debris to planning and design fees, materials and building work.

It should not be confused with market value. In many cases, this will be higher so if you rely on it, you could pay more than you need to in insurance premiums. On the flipside, if your valuation is too low, your provider may reduce the claim and settlement proportionally to the value of the under insurance. This leaves the policy holder liable for the shortfall, which in some cases is significant.

If a building is totally destroyed, many policies will allow it to be rebuilt using alternative materials which could be less expensive than the original. However, in the majority of claims, the loss is only partial and it’s important that your valuation reflects the price of repairs to the existing fabric. In a listed building, for example, that may be considerably more than a new build cost. 

What all this means is that a reinstatement valuation should be carried out by someone who is suitably qualified, with the knowledge to evaluate the building, taking the following into account: 

• Listed or conservation area status
• Age
• Construction materials
• High-tech, eco, non-standard design or extensive external features
• Extensions or significant alterations
• Location constraints
• Deleterious materials, in particular asbestos
• Professional fees
  
  

Further information

Contact Savills Architectural Design