Reinstatement Cost Analysis

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A Reinstatement Cost Assessment (RCA) is a survey conducted by a qualified surveyor to estimate the cost of fully rebuilding your property if it were severely damaged. Although such accidents are rare, in the case of a fire or major structural event this assessment covers the expenses for demolition, debris removal, temporary housing, professional fees, and any rebuild costs.

An accurate reinstatement cost significantly impacts your building insurance premium. It ensures you are properly insured, avoiding excessively high premiums or, worse, being under-insured.

For example, in a typical building, being over-insured by £1 million could raise your premium by £1,000 annually. On the other hand, being under-insured poses a serious financial risk. If your building’s insurance covers a reinstatement cost of £2 million but the actual cost would be £2.3 million, any payout may be proportionally reduced. In this case, you would only receive £1.7 million, leaving property owners to cover a shortfall of £600,000. This could make it impossible to fully restore the property—a devastating situation for owners.

Construction and material costs can vary over time, so it’s essential to regularly update your reinstatement cost. The Factors Code of Conduct advises an RCA every five years, while RICS and some insurers recommend one every three years.

For years when an RCA isn’t completed, the reinstatement cost is typically adjusted according to official inflation rates, helping to keep your coverage accurate

You can read a comprehensive explanation on the RICS (Royal Institute of Chartered Surveyors website:

RCA for insurance purposes