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A must for 2026 is to safeguard your property with a Reinstatement Cost Assessment (RCA.) Also known as a building reinstatement cost assessment, it provides a precise evaluation of the cost required to reinstate a property and its contents, after damage, including materials, labour, clean-up etc. This differs from a valuation of the property, which is a researched current market value of the property based on location, size etc. to gain a sale/purchase price.

RCAs are essential for complying with the Insurance Contracts Act 1984, which requires accurate property information for insurance. Having an accurate RCA ensures you’re not only meeting your legal responsibilities as a property owner but also securing your own peace of mind.

Are you under or over insured?

A significant proportion of commercial properties are exposed to serious risk, with an estimated 71%* believed to be underinsured. If you do one thing this year, make sure you check your insurance is correct to safeguard your property.

Underinsurance typically occurs when:

• Property and asset values are inaccurately declared
• The required reinstatement period is underestimated
• Building sums insured have not been reviewed for several years

In the event of a claim, underinsurance can lead to a substantial shortfall in the insurer’s payout, leaving the property owner to cover the balance.

Maintaining an up-to-date RCA ensures that the insured sums are both accurate and appropriate, so it could be you are over-insured instead.

Has your commercial property undergone an RCA within the last three years?

The Royal Institution of Chartered Surveyors (RICS) advises that a full RCA should be undertaken at least every three years, or sooner if the property has undergone alterations since the previous assessment.

Given the substantial increases in construction material and labour costs in recent years, an annual review is also recommended to ensure the adequacy of your existing insurance cover.

It is imperative that an RCA is conducted by a suitably qualified surveyor with the necessary expertise and registered with RICS. A RICS-registered professional adheres to the standards and guidance set out in Reinstatement Cost Assessments of Buildings.

RCA Case study

We recently advised a client in Droitwich to commission a Reinstatement Cost Assessment (RCA) following a programme of property refurbishments and the addition of new barn space. At the outset, the client questioned whether these changes would materially affect the property’s reinstatement value. However, on our recommendation, they proceeded with the assessment.

Shortly afterwards, a fire caused extensive damage to the property. Thanks to the recently completed RCA, the property was correctly insured, enabling the client to recover the full reinstatement cost without delay.

Had the assessment not been updated, the property would have been significantly underinsured, leading to a substantial financial shortfall and serious disruption to business operations. The RCA proved critical in protecting the client’s financial position and ensuring continuity following a major loss.

To request a Reinstatement Cost Assessment, call us on 01905 676169 or visit the website to learn more about RCAs

*stats courtesy of Building Cost Information service, correct at time of print.

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