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 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.
"Reinstatement cost assessments ensure your property is accurately covered, protecting you from financial loss due to underinsurance or overpayment. It is a vital step for peace of mind and safeguarding your assets."
Our property reinstatement valuation sector experience
We are able to assess a wide range of commercial property types. Our sector experience includes:
- Commercial: offices, industrial, and retail
- Rail and transport
- Education: schools, colleges, and universities.
- Licenced leisure: hotels, public houses, and restaurants
- Healthcare and community facilities
Another area of expertise for our team is the financial sector. We act for the majority of major UK banks, providing reinstatement values for buildings and contents throughout the year.
What does a reinstatement cost assessment cover?
An RCA is not a market valuation. It does not reflect what a buyer would pay for your property; it reflects what it would cost to rebuild it. Those figures can be significantly different, and using a market valuation as the basis for your sum insured is one of the most common causes of underinsurance.
A professionally prepared RCA accounts for all the costs involved in a full rebuild, including:
- Demolition and site clearance
- Construction and materials costs at current market rates
- Professional fees for architects, engineers, and project managers
- Local authority and statutory fees
- Inflation and build cost movements between the assessment date and any future reinstatement
BTG Eddisons' surveyors calculate reinstatement costs using BCIS data and direct site appraisal, ensuring figures reflect current construction costs for your specific property type, specification, and location.
Who needs a reinstatement cost assessment?
Any business or property owner with commercial property or significant business assets should have a current RCA in place. It is particularly important where:
- Existing valuations are three or more years old
- Construction costs or asset values have moved significantly since the last assessment
- The property has been extended, refurbished, or significantly altered
- The business has invested in new plant, machinery, or fit-out
- Assets include specialist, imported, or bespoke machinery
- A lender or insurer requires an updated figure as a condition of cover or finance
- A policy is due for renewal and accurate reinstatement figures are required
Assets should be reassessed every three to five years as a minimum. While insurers can index-link the sum insured between assessments, construction and replacement costs can move more sharply than index adjustments allow, particularly in periods of high inflation or supply chain disruption.
Experts in commercial property
Contact our team of leading auctioneers, property agents, and RICS-qualified surveyors today.
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 |
A professional RCA prepared by RICS-regulated valuers provides the evidence base an insurer and loss adjuster need to settle a claim fairly, and can facilitate the removal of the average clause entirely.
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.
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 to discuss your requirements, and a member of our team will be in touch.
