With construction costs continually on the rise it is more important than ever to review your buildings insurance. The Irish Times recently reported that 1 in 6 insurance claims made to a leading home insurance provider is not being paid in full because policyholders have not factored in skyrocketing building costs when they renew their premiums. If your building is underinsured you risk being subject to the ‘average rule’ clause by you insurer in the event of a claim. Lets look at an example:

You insured your building on January 1st, 2020 with a rebuild value of €500,000.
You incorrectly reinsure the same building on January 1st, 2023 with the same rebuild value of €500,000. Due to rising building costs, and based on construction cost indices published by the Society of Chartered Surveyors Ireland, the rebuild value on January 1st, 2023 may have been closer to €617,500. This represents an under insurance of 23.5%.
Should you make a claim on your policy for damage caused on January 2nd, 2023 for say €80,000 worth of repairs your claim may be reduced by 23.5% so your pay out will be €61,200 (this is average clause rule).

Depending on the complexity of the building, and whether or not floor plans are available, some degree of measurement will be required and in some cases a full measured survey may be necessary to establish floor areas and allow for measurement complex facades etc.

Home insurance policyholders are due to receive a letter in the weeks ahead as insurers seek to raise awareness of the risks of being underinsured there is no better time to review your building reinstatement value. This can be calculated by engaging a Chartered Building Surveyor to carry out a Building Reinstatement Cost Assessment (BCRA) .

What is a Building Reinstatement Cost Assessment?

A BRCA provides a detailed overview of the expenses involved in demolishing and rebuilding a property, including any additional or unusual features. To conduct this assessment, it's advisable to seek assistance from professional chartered surveyors who possess the necessary expertise. They will thoroughly evaluate various aspects, such as:

Foundations
Structures
Demolition Costs
Debris Removal Costs
Professional Labour and Materials
Unusual or special features
Additional costs due to site locations restrictions on building works

Depending on the complexity of the building, and whether or not floor plans are available, some degree of measurement will be required and in some cases a full measured survey may be necessary to establish floor areas and allow for measurement complex facades etc.

How to obtain a Building Reinstatement Cost Assessment?

The Society of Chartered Surveyors Ireland provides an excellent tool on their website called the SCSI House Rebuild Calculator. However it is important to note the calculator assumptions, one in particular being that;

the calculator only covers estate-type houses built in Ireland since the 1960s. The calculator does not cover properties with more than three storeys or with basements, bespoke properties or period houses (Victorian/Georgian).

To conclude, a Building Reinstatement Cost Assessment provides a comprehensive evaluation of the expenses involved in demolishing and rebuilding a property. By obtaining an agreed rebuild value, property owners can ensure that they have adequate insurance coverage. Avoid the risks of underinsurance and overspending on premiums by opting for a BRCA survey. Book yours today