Landlords and homeowners should consider a new rebuild cost assessment when they add an extension, upgrade a kitchen or bathroom, alter the layout or change how a building is used, according to RebuildCostASSESSMENT.com.
The insurance valuations provider identifies four triggers for reviewing cover: significant alterations, refurbishments and upgrades, a change of use, and the age of the existing assessment.
“One of the most obvious reasons to review the property’s rebuild cost is if significant alterations have been made,” said Johnny Thomson, head of strategic planning.
“These could include adding an extension, converting a loft, changing the roof or altering the internal layout. It’s changes like these that could affect the cost of reinstating a property and invalidate the previous rebuild cost assessment, which may no longer accurately reflect the building as it stands today.”
Research carried out by the company earlier this year found that nine in 10 UK properties are inaccurately insured. It put 67% of properties as underinsured and 25% as overinsured, with only 8% accurately insured. The firm says that makes keeping the rebuild cost current more pressing.
What about refurbishments and upgrades?
Major structural work is not the only trigger. Refurbishments and upgrades can change a property’s specification and, with it, the cost of reinstating the building. A new kitchen or bathroom, higher-specification finishes, upgraded heating systems or fixed air-conditioning can all affect the rebuild cost.
A change in how a building is used is another reason to review. Converting an office into residential accommodation, for example, could significantly alter the property and its reinstatement requirements. A new occupier may also make substantial alterations or install new fixed equipment, and if those changes affect the building, the existing rebuild cost assessment may need a review.
How often should a property’s rebuild cost be reviewed?
Even without significant changes, the age of an existing assessment matters. As a general guide, the company recommends arranging a new assessment every three years, so that the rebuild cost reflects the property and its current reinstatement requirements rather than its past record.
“The key question to ask is: has the property changed significantly, or is the existing assessment getting older?” he added.
“If there have been changes, it could be time for a new rebuild cost assessment. The most important thing is to stay on the ball and regularly check the age of the last assessment and to consider carefully whether any recent changes made to the property could affect the rebuild cost, in the event of a claim. The best advice is: don’t get caught short!”
