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  • Writer's

The Clock Is Ticking: Validity Period of Your Rebuild Cost Assessment

Updated: May 4

Today, we're shedding light on an essential aspect of property ownership: The validity period of your rebuild cost assessment (RCA). Whether you're a commercial property owner or a homeowner, understanding this crucial timeframe can have a significant impact on your financial security and peace of mind.

A UK street with terraced houses transitioning from daytime to a night scene with a large clock, symbolising the importance of timely rebuild cost assessments for property insurance, with a focus on a corner building undergoing construction.

What is a Rebuild Cost Assessment?

Before we dive into the validity period of your RCA, let's briefly recap what a rebuild cost assessment is and why it's indispensable for insurance purposes:

An RCA helps estimate the cost of rebuilding your property if it's damaged or lost. It's a safety net for your insurance, making sure you're well-covered in case your property faces unexpected disaster.

How Long is a Rebuild Cost Assessment Valid For?

Typically, an RCA remains valid for three years, providing you with a reliable baseline for insurance coverage. However, there's nothing wrong with getting it done sooner. In fact, it's a proactive step that can save you from potential underinsurance pitfalls (more about that later, in Gillian’s heartbreaking story).

For a quick explanation, you can watch our "Ask Amy" video below, and for more details, just keep scrolling.

Factors that Affect the Validity of a Rebuild Cost Assessment

Several factors can influence the validity of your RCA. Market conditions, such as inflation, can affect building costs, potentially increasing the amount needed for rebuilding. Any renovations, structural changes, or improvements made to your property should also prompt a reassessment. Even the rising or falling costs of materials can impact the accuracy of your RCA, making timely updates really important. 

For more details about this aspect, read our blog Understanding Rebuild Cost vs Market Value.

Implications for Insurance Coverage

Now, let's discuss how the validity of your rebuild cost assessment (also known as a reinstatement cost assessment) directly affects your insurance coverage. Insurance companies base your declared value or sums insured on the information provided in your RCA report (if you have one!). If your assessment is outdated or inaccurate, it can lead to big implications for both your insurance premiums and claim payouts.

The long and short of it: An outdated RCA can mean you don’t get the full payout, in the event of an insurance claim.

When Should You Update Your Rebuild Cost Assessment?

To ensure you maintain the right amount of coverage, we recommend updating your RCA every three years. But it's not just about the timeframe. A re-assessment should also take place if any significant changes occur to your property, such as refurbishments or extensions.

If there are significant rises in the costs of labour, materials, or even inflation, these can also play a role. Taking a proactive approach ensures your insurance remains aligned with your property's true value, and means you won’t be caught out by underinsurance, if the worst were to happen.

Real-life Scenario: Gillian's Boutique Dilemma

All this talk about underinsurance, reinstatement costs, and validity may sound like a lot of industry mumbo-jumbo. But it’s actually a critically important thing to understand, whether you’re a small business owner with a commercial property, or a homeowner.

To demonstrate just how important this issue is, we’ve got a telling example for you:

Meet Gillian, the proud owner of a charming boutique located in a picturesque town on the seaside. Gillian had her property insured based on a rebuild cost assessment conducted a few years ago when she first opened her shop. At that time, her RCA determined the rebuild cost would be around £200,000. She trusted her insurance to cover any unforeseen events, never considering the need for an updated assessment.

A UK seaside boutique shown in a split view, with the left side depicting the store in its bustling prime and the right side illustrating the aftermath of a fire, including a heartbroken owner, underscoring the boutique's solitary damage and the emotional toll of underinsurance.

The Thriving Boutique

Gillian's boutique had been flourishing. She introduced new collections, expanded her store, and made renovations that improved the look and feel of the property. Her hard work and dedication paid off, and her boutique became a beloved local gem.

The Unforeseen Event

One fateful day, disaster struck when an unexpected fire broke out in her boutique. The fire caused extensive damage to the property, leaving Gillian devastated. She turned to her insurance policy, believing it would provide the necessary coverage to rebuild her beloved boutique. She got quotes from several builders for reinstating the property, and they each fell under £190,000 – to her relief. Surely, with coverage for £200,000, she would be in the clear? Not so fast.

Gillian's Underinsurance Shock

To Gillian's shock, she discovered that her outdated rebuild cost assessment had left her underinsured. Gillian’s insurer determined that the property should actually have been valued at £400,000. This means she was 50% underinsured. The result? Instead of getting the full £180,000 needed to rebuild her property, she only received £90,000 from her insurer. Not nearly enough to rebuild her boutique (and her only source of income) to its former glory. Gillian faced potential financial ruin, and the heartbreaking prospect of losing her dream business.

The Importance of Timely Reassessments

Gillian's story highlights the critical importance of timely RCAs. If only she had realised the value of keeping her assessment up-to-date, and better understood the average clause in insurance, she could have avoided the financial hardship that followed the fire.

The Lesson Learned

In the end, Gillian's boutique dilemma serves as a important reminder to all property owners. Regularly updating your rebuild cost assessment can make all the difference in protecting your investment, ensuring financial security, and safeguarding your dreams and hard work from unexpected setbacks. Don't wait until it's too late. Prioritise timely reassessments for your peace of mind and your business's future.

How to Get an Updated Rebuild Cost Assessment:

Obtaining an updated rebuild cost assessment is a straightforward process. Ensure you choose a reputable provider, ideally one that's RICS-qualified, like Our professionals can accurately assess your property's current value, ensuring your insurance coverage remains adequate. Best of all, we’ve got desktop and on-site assessment options, to suit your particular circumstances.

A UK property owner standing confidently in front of a well-maintained factory, holding a document titled 'Up-to-Date Rebuild Cost Assessment', symbolising proactive insurance planning against a backdrop of industrial buildings.

Don’t Fall Victim to an Outdated Rebuild Cost Assessment

The validity period of your rebuild cost assessment is a critical aspect of property ownership that directly impacts your insurance coverage. Regular updates every three years, or when significant changes occur, help safeguard your financial security and peace of mind. Don't wait until disaster strikes. Take proactive steps to ensure you're adequately insured.

Ready to secure your property's future? Schedule your updated rebuild cost assessment today with We offer both desktop and in-person assessments, to protect your investment, and ensure your insurance coverage reflects your property's true value. Your peace of mind is just a click away!

Important disclaimer: The information provided here is for general informational purposes only and is not intended as professional advice. While we strive to ensure all information is accurate and up-to-date, the content may not reflect the most current legal or regulatory developments, standards, or practices. No representations or warranties are made (express or implied) about the accuracy of the information provided, and reliance on this information is strictly at your own risk.

We do not offer financial advice and nothing within this content should be construed as such. We recommend consulting with a qualified professional who can provide tailored advice based on your individual circumstances before making any decisions related to insurance.

Please note that we are not regulated by the Financial Conduct Authority (FCA) and as such, are not qualified to provide specific financial or insurance advice. Please see our footer for further information about us, including our website terms of use, privacy policy and more.


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