What is a reinstatement cost assessment?
A reinstatement cost assessment (RCA) determines how much it would cost to demolish and rebuild a property from scratch – should it be destroyed by fire, flood, or structural failure. That figure is the basis on which your commercial space should be insured.
Get it wrong in either direction and there are consequences. If the sum insured is too low, you are exposed to the average clause and a claim payout that falls well short of your actual loss. If it is too high, you are paying more in premiums than you need to. An accurate, professionally prepared RCA is the foundation of sound property insurance.
Our team is ready to discuss your reinstatement valuation requirements. Simply complete our contact form further down the page or call 0800 051 2593 to get started.
Getting a reinstatement cost assessment with BTG Eddisons
Our team is highly skilled at providing reinstatement valuations based on accurate appraisals of your property, plant, machinery, and other assets. This ensures that you are not paying too much on premiums or too little, which could leave you underinsured and exposed to unnecessary risk.
As RICS surveyors, we are fully qualified to visit sites and conduct research through BCIS data and other sources to provide reinstatement cost assessments. Our values are calculated by factoring in all necessary costs, including demolition expenses and fees to local authorities, giving you peace of mind that you will be able to fully reinstate your assets.
Contact our reinstatement cost assessment team
Our RCA team is here to ensure your assets are accurately assessed and fully protected. Call 0800 051 2593 to speak with our team and discover how we can support you.
What are the consequences of underinsurance?
Underinsurance on a reinstatement basis is more common than most property owners realise, and the consequences when a claim arises can be severe.
Research from 2025 found that over 45% of commercial properties in the UK are currently underinsured, with the average building covered for just under 70% of its correct rebuild value. Where that gap exists, businesses bear the difference themselves.
When a property is underinsured, insurers invoke what is known as the average clause. This reduces any claim payout in proportion to the degree of underinsurance. The example below illustrates how this works in practice:
|
Sums insured |
£4,000,000 |
|
True reinstatement value (established by loss adjuster) |
£8,000,000 |
|
Claim submitted |
£2,000,000 |
|
Claim paid (50% of submitted claim — reflecting 50% underinsurance) |
£1,000,000 |
|
Shortfall borne by the policyholder |
£1,000,000 |
The figures above are illustrative. Actual reinstatement values, the impact on insurance premiums, and the way the average clause applies in the event of a claim all depend on your individual policy wording and the specific characteristics of your property.
Before making any cover decisions, we recommend confirming your reinstatement position with a qualified surveyor and discussing the implications with your insurer or broker.
Is your property correctly insured for reinstatement?
Our RICS-accredited surveyors can assess whether your current sum insured reflects the true rebuild cost, and identify any gap before it becomes a problem at claim. Call 0800 051 2593 or email [email protected] to arrange an assessment.
Underinsurance of plant and machinery
Underinsurance is particularly prevalent for plant and machinery, and the reasons are predictable. Most policies are written on a new-for-old basis, meaning the sum insured must reflect the cost of replacing all equipment with brand new items regardless of the age or condition of what was lost.
In practice, sums insured are often based on original purchase cost, written-down book value after depreciation, or historical figures that have not been reviewed for years. Any of these can result in a significant shortfall at claim.
Where a full new-for-old basis is not appropriate, BTG Eddisons can advise on alternative approaches:
Indemnity cost assessment
The sum insured reflects the cost of replacing equipment with identical or substantially similar items in comparable condition, accounting for age, wear, and market availability.
Market value
Where assets are surplus or no longer in active use, they may be insured at their recoverable market value rather than their replacement cost.
Modern equivalent
Where older equipment has a lower output than its modern equivalent, insuring on a modern equivalent basis can reduce premiums. In the event of a claim, older machines are replaced with a smaller number of more productive modern units, achieving the same operational output at lower cost.
Not sure which valuation basis applies to your assets?
Our team advises on the most appropriate methodology for every asset category. Email [email protected] to discuss your specific requirements.
Why choose BTG Eddisons for reinstatement cost assessments?
- RICS-accredited surveyors – Our assessments are prepared by qualified chartered surveyors operating to RICS standards, the benchmark insurers, lenders, and loss adjusters require.
- National coverage – We operate from 35 offices across the UK, with surveyors close to your property wherever it is located.
- Full cost methodology – Our assessments account for demolition, rebuild, professional fees, and statutory costs, not just construction.
- Broad sector expertise – From standard commercial premises to specialist educational and healthcare facilities, our team has the knowledge to produce accurate assessments across many sectors.
- Proven track record – Our positive client reviews reflect the quality and consistency of the service we deliver across every instruction.
Arrange a reinstatement cost assessment today
Our team covers commercial property and business assets across the UK. Complete the form below or ring 0800 051 2593 to discuss your requirements, and a member of our team will be in touch.
Get in touch with the BTG Eddisons team
Please contact us for more details and information.
