If you are a commercial property owner, you should have regular assessments of your property value to ensure that you are adequately insured in the event of a fire or other disastrous incident. Should a worst case scenario event take place, an incorrectly valued property may mean that your insurance will be insufficient to meet the costs of a rebuild – a naturally devastating position for any business. To ensure your business is covered, a chartered building surveyor can carry out a reinstatement cost assessment (or RCA) on a variety of property types, which we present as full measurements and calculations, as well as desktop reviews. Here’s everything you need to know about the processes behind an RCA.
What is an RCA?
As outlined above, an RCA is an assessment carried out by a chartered building surveyor that is used to calculate what the cost would be to rebuild your property in the event of a disaster. The assessment can also be used to help advise you on the total cost of demolition or the value of your property if a DRC (or depreciated replacement cost) valuation is undertaken. They are necessary to ensure that you have the funds or insurance cover you would require to rebuild your property should it ever be necessary in order to ensure the successful running of your business. It is equally important to ensure you are insured for the correct amount, as even for a smaller claim, some insurers will cross check the insured figure and may only make part payment if they consider you are under insured.
Who is responsible for an RCA?
If you are the owner of a commercial property, you are responsible for ensuring that an RCA is carried out on a regular basis. If you lease your property, it is usually your responsibility as the property owner to ensure that an appropriate level of insurance cover is in place; however, it is worth checking your lease as in some cases the responsibility may instead lie with the tenant. If any changes to the building are made, a further assessment should be carried out in case the cost has increased or decreased.
What information is needed for an RCA?
Naturally, our surveyors will need to know an accurate address and be granted access to all areas of the property. As well as this, we may need to see building plans, health and safety files and other documents of importance. The surveyor will then take the building’s age, construction, height, location and services into consideration when making their calculations. The more information you provide, the more advice we can offer, and the more accurate your RCA will be.
How often should an RCA be carried out?
Current advice suggests that an RCA is carried out every three years, with a simple desktop re-evaluation carried out annually. As well as this, any changes, extensions or improvements to either the interior or exterior will require another RCA to be carried out. The accuracy of an RCA is vitally important. If a serious event does occur and your property is in need of a rebuild, an undervalued RCA could mean that you may not receive the funds needed to cover the costs; by contrast, an overvalued RCA may lead to a legal battle that could threaten your chances to receive any funds.