Did you know that over 90% of commercial Irish properties are not insured for the correct amount? This fact creates a serious risk for your clients. Property owners need exact rebuild values to avoid insurance gaps. This guide explains why insurance brokers should partner with rebuild valuation experts and how this benefits both you and your clients.
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What Is a Reinstatement Cost Assessment?
A Reinstatement Cost Assessment (RCA) calculates the exact cost to rebuild a property from scratch after total destruction. This assessment includes demolition costs, building materials, labour expenses, professional fees, and compliance with current building regulations.
The RCA value differs greatly from market value. Market value considers location desirability, land value, and property condition. Rebuild costs focus solely on construction expenses needed to recreate the same building.
Why Do Market Value and Reinstatement Cost Differ?
Many property owners mistakenly insure buildings based on market value. This creates problems because:
- The market value includes the land, which remains even after a building is destroyed
- Older buildings may have a lower market value but higher rebuild costs due to specialised construction methods
- Construction costs change independently from property market trends
For some properties, reinstatement costs can exceed market value, especially with historic or listed buildings that need special materials or craftsmanship.
How Does the Average Clause Impact Your Clients?
The Average Clause exists in most property insurance policies. This clause reduces claim payouts proportionally to underinsurance levels. For example, if a building is insured for €500,000 but the true rebuild cost is €1,000,000, the insurer may pay only 50% of any claim.
This creates serious financial risk for your clients. They believe they have full coverage but discover during a claim that they must pay substantial amounts themselves.
Why Should Insurance Brokers Partner with RCA Specialists?
As an insurance broker, you have a duty to help clients get the right coverage. Offering professional RCAs:
- Protects clients from devastating underinsurance gaps
- Demonstrates your professional expertise and care
- Reduces your liability risk from providing incomplete advice
- Creates additional value beyond simple policy sales
- Builds stronger client relationships based on trust
Chartered surveyors specialise in accurate property valuations. We understand building methods, construction costs, and insurance requirements.
When Should You Recommend an RCA to Clients?
You should recommend a professional RCA:
- For all new commercial property insurance policies
- When clients change insurers or renew policies
- After major building renovations or extensions
- Every three years to account for changing construction costs
- For high-value or unique properties
- For properties with special architectural features
- For listed or historic buildings
Regular assessments help clients maintain proper coverage as building costs change over time.
How Do Construction Costs Impact Reinstatement Values?
Construction costs change constantly due to:
- Material costs increasing or decreasing
- Labour rates changing
- New building regulations requiring additional features
- Supply chain disruptions affecting material availability
The BCIS (Building Cost Information Service) from RICS tracks these changes. Recent years have seen construction inflation of up to 14% annually in Ireland. This rapid change means rebuild values quickly become outdated.
How Do We Calculate Accurate Reinstatement Costs?
Our RICS-regulated chartered surveyors follow a precise process:
- We visit your client’s property in person
- We assess building size, construction methods, and materials used
- We note special features requiring specialised reconstruction
- We calculate demolition and debris removal costs
- We add professional fees for architects and engineers
- We include VAT and other applicable taxes
- We apply current building regulations requirements
This thorough approach ensures accurate insurance coverage that truly protects your clients.
What Information Does Our RCA Report Include?
Our comprehensive RCA reports provide:
- Clear reinstatement cost figure for insurance purposes
- Detailed breakdown of how we calculated the value
- Property specifications we based our assessment on
- Explanation of special features impacting rebuild costs
- Professional certification from RICS-regulated surveyors
- Recommendations for reassessment frequency
This detailed documentation helps you explain coverage needs to clients and supports your professional advice.
How Does an RCA Benefit Your Insurance Brokerage?
Partnering with us for RCA services brings multiple benefits:
- You can offer clients complete insurance solutions, not just policies
- You eliminate a major source of client dissatisfaction at claim time
- You fulfill your professional obligation to help clients get proper coverage
- You increase client retention through demonstrated expertise
- You gain a competitive advantage over brokers who don’t address rebuild values
- You build trust through transparent, professional advice
We offer special partnership options for insurance brokers including discounted rates for your clients.
How Can You Start Offering RCA Services Through Rebuild Valuation?
Working with us is simple:
- Contact us to set up a broker account
- We provide you with clear information about our services for your clients
- You refer clients needing RCAs directly to us
- We provide professional assessments and detailed reports
- Your clients get accurate insurance coverage based on true rebuild costs
- Your clients receive expert service from RICS-regulated surveyors with over 20 years of experience in property claims and valuations
Key Points to Remember About Reinstatement Cost Assessments
- Over 90% of Irish commercial buildings are underinsured
- The Average Clause severely penalises underinsured properties at claim time
- Market value and reinstatement cost are completely different values
- Construction costs in Ireland have risen dramatically in recent years
- On-site assessments by chartered surveyors provide the most accurate valuations
- RCAs should be updated every three years at minimum
- Offering RCA services helps fulfill your professional obligations as a broker
- Partnership with RCA specialists adds significant value to your brokerage offering
Take the first step to protect your clients and enhance your brokerage services. Contact Rebuild Valuation today to discuss partnership options and special broker rates.