What is a rebuild cost assessment?

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As a homeowner or landlord, you may already know how important it is to have insurance for your property. However, have you considered if your property is adequately insured? 

One way to determine this is through a rebuild cost assessment, which estimates the cost of rebuilding your property in the event of damage or destruction. But where do you even start with this process? 

How do you decide on the type of evaluation you need, and how much will it cost? Don’t worry, we’ve got you covered. In this text, we’ll walk you through the steps of getting a rebuild cost assessment, including how to choose the right type of evaluation and what factors affect the cost and time it takes to complete. 

By the end, you’ll have a better understanding of why a rebuild cost assessment is crucial for protecting your property, and how to ensure that you’re adequately insured with what insurance you need as a landlord.

rebuild cost assessment sign

How to get a rebuild cost assessment step by step

If you are a homeowner, it is common to be at a loss as to where to start when it comes to getting a rebuild cost assessment. In the below steps, we will talk about how you can do just this so you can start insuring your property.

Sometimes, a home insurance provider will be able to do this assessment for you in which case you will not need to worry about it but if not, follow along carefully and be sure to do your own research at the same time so you can make the best decision for you.

Decide on the type of evaluation

Deciding on the right type of evaluation necessary in a rebuild cost assessment can depend on several factors, including the type of property, the purpose of the assessment, and the level of detail required. You may want a thorough evaluation that is done by a qualified surveyor or you may want to conduct the valuation yourself if you just want a rough estimate.

In general, the type of property you’re assessing will impact the type of evaluation you need. For example, a commercial property may require a more detailed assessment than a residential property due to its complexity and the potential costs involved.

Also, the purpose of the assessment will also influence the type of evaluation you need. If you’re simply looking for a general estimate of the rebuilding costs, a basic evaluation may be sufficient. 

However, if you’re planning to purchase insurance coverage or need a more detailed assessment for legal purposes, a more comprehensive evaluation may be necessary.

Finally, your budget will also play a role in determining the type of evaluation you need. A more detailed evaluation will generally cost more than a basic evaluation, so it’s important to consider your budget when deciding on the type of evaluation to pursue.

Most of the time, the budget that you assign to the rebuild cost assessment will be relative to the cost of the building as it is worth having a higher budget if the property is going to be worth more money anyway.

Calculate the cost

The cost of a rebuild cost assessment can vary depending on a number of factors, including the size and complexity of the property, the level of detail required, and the location of the property. But this list just scratches the surface and there is far more that goes into play.

To get an accurate estimate of the cost of a rebuild cost assessment, it’s best to consult with a professional appraiser or building surveyor who can provide a quote based on the specifics of your property. They will price their service based on:

  • The size and complexity of the property
  • If the project is commercial or residential (commercial buildings tend to cost more)
  • The solicitor fees associated with the building
  • Any costs associated with site clearance
  • The number of outbuildings and detached premises from the main building
  • The size and scope of any car parking space
  • If there is any additional tax to be paid on materials
  • If there is asbestos in the building
a home that needs a rebuild cost assessment

How much will a rebuild cost assessment cost?

In general, for an average sized home, the average cost of a rebuild costs assessment will be around £150 and you can find the best prices by visiting a price comparison website like go compare here.

There you will be able to find anything from the cost of rebuild assessments to the price of landlord boiler cover so it is certainly a useful website to keep in mind anyway.

What else do you need to know about a rebuild cost assessment?

Below are some questions that are frequently asked when it comes to rebuild cost assessments.

How long does an assessment take?

The time it takes to complete a rebuild cost assessment can vary quite a bit but in general, a simple rebuild cost assessment for a standard residential property can take a few hours to complete.

Having said this, the size of a building is the main factor in determining how long it will take and a more complex commercial property or high-value home may require several days or even weeks to complete. 

Will sheds be included in a rebuild cost assessment

Yes, the outbuildings of a home will also be included in a rebuild cost assessment. This is because the assessment must be as accurate as possible and any building within the boundary of a property must all be included within an assessment.

If the assessment is not accurate then this is fairly problematic, so even if you think the value of a shed or outhouse isn’t that much, a good surveyor should include this within costs.

Can you calculate your rebuild costs yourself?

Most of the time, building surveys are done by professionals who are licensed and have to be trained for the job. This means the most likely person to do it is a surveyor or a chartered surveyor.

Not only do they have to be familiar with the type of value attached to a property but they also have to know about the law and the building codes and regulations to be sure that a property is compliant.

Having said this, there is a good chance that you will be able to find out the rough rebuild cost yourself by doing a basic inspection of a property.

Look for things like the average cost of materials used to build a house, the labour associated with building the features of a house and the complexity of the building.

It is important to understand that you shouldn’t look into things like the market conditions, the location of the property or the demand of the area in terms of sales.

Rebuild cost assessments are irrespective of market conditions as the cost is calculated as the cost of if the building was to be burned to the ground and then re-constructed using the same materials – without being sold.

assessing the cost of a building

Can you find up to date cost assessments of your home?

You may be able to find up to date rebuild cost assessments of the home you’re living in by asking previous owners for this information if you are buying from someone. Or you can try to find the relevant documentation by going to the land registry here.

However, you can also produce a fairly inaccurate assessment but one that can give you a good estimate by using the BCIS calculator here.

To estimate the rebuild cost of your property, you can start by measuring the lengths and widths of each room separately, then multiply them to get the individual area for each room. After that, you can add all the areas together to get a total.

Once you have the total, you can head to a website that provides rebuild cost assessment tools to obtain an estimate that is similar to the value of your home. This figure can vary depending on the location and type of property. For instance, lower-end properties may have a rebuild cost estimate around £100,000, while higher-end properties in London, where property prices are significantly higher, may have a figure closer to £300,000.

It is worth noting that the average rebuild cost of a property in the UK for a 1,400 square foot house is £243,889, which is quite similar to the true value of a property. 

As of 2022, the average property price in the UK is £296,000. This highlights how important it is to accurately assess the rebuild cost of a property when obtaining insurance coverage as if it is done inaccurately or not at all you could be left in debt.

How does this affect the insurance premium of a property?

As all insurance tends to go, whether that be rent guarantee insurance, landlord boiler cover or house insurance for empty properties, the higher the rebuild cost assessment, the higher the premium.

There are of course other factors that go into the price of a premium like the insurance provider you go with and the risk associated with property in the physical location of the premises. But rebuild costs assessments certainly do affect the premium paid. 

Can a property be underinsured?

A rebuild cost assessment is essential for property insurance because insurance companies use this estimate to determine the value of the property they will cover in the event of significant damage. 

If the property is destroyed and cannot be repaired, the landlord can be confident that the insurance company will cover the reconstruction costs if the rebuild cost assessment was done correctly.

Let’s assume a landlord insures a property for its market value of £150,000 rather than its estimated rebuild cost of £200,000. The landlord will be liable for the difference of £50,000 if a fire destroys the property.

This emphasises the importance of accurately estimating a property’s rebuild cost when obtaining insurance coverage and a property can certainly be underinsured.

This is something that a lender and a landlord will want to avoid at all costs due to the potential to fall into debt and the property be repossessed. So, make sure you are following the rebuild cost assessment closely and using the best surveyors.

rebuild assessment cost

How does the insurer’s average rule work?

The average rule is found in the terms and conditions of most building insurance policies. Simply put, if you are underinsured for any amount, the insurer can and will reduce your claim by the same percentage.

To make this make sense, let’s assume your building is insured for £300,000 but should really be insured for £600,000. This means you are 50% underinsured. 

If you file a £100,000 claim, the insurer will only pay you half of that amount, or £50,000. This rule, regardless of wealth, can have a significant financial impact on commercial property owners and landlords. 

It is critical that you understand this rule and have adequate insurance coverage to protect your business from this type of risk as not all homeowners or businesses have the cash on hand to cover claims like this so you may want to go for a higher premium that will allow you to not be underinsured.

In conclusion

To wrap up the topic of rebuild cost assessments, it is clear that there is no escaping the assessment as it is just part of the processes involved when working out what insurance you need when buying a house.

As it remains necessary to determine the estimated cost of rebuilding a property in the event of damage or destruction. To get a rebuild cost assessment, you need to decide on the type of evaluation that suits your needs, consider your budget, and calculate the cost. 

You can consult a professional appraiser or building surveyor to get an accurate estimate of the cost, which can range from a few hundred to a few thousand pounds.

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Donnell Bailey

Property expert

Donnell is a property expert focusing on the property market, he looks at a combination of legislation, information from property managers, letting agents and market trends to produce information to help landlords.


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