What is a Buildings Replacement Insurance Valuation?

This is "as it says on the tin", namely the cost of rebuilding a property irrespective of the condition the building or site may be left in following a disaster. It is not the same as the market price of the property or the cost of building the property.

At the time of carrying out most building and advice inspections, it is typical for the surveyor to provide a building replacement valuation that will be required for a purchaser's buildings insurance.

This should be updated regularly depending upon the terms and conditions of the policy provider. Many policies are typically indexed linked and assume that the Buildings Replacement Valuation is acceptable as a basis for insurance for 5 years. After 5 years any difference will possibly result in inadequate insurance cover.

Insurance companies do not usually pay up the pro rata differential of even a small claim and any claimant would need to find this amount. Different policies have different terms and conditions and it is recommended that these be read carefully.

Some insurance brokers and companies sometimes inappropriately try to indicate to their clients the Building Costs of properties. In their small print you will usually find that they are not insured and that it is the responsibility of the owner to be certain that the figure they provide is correct.

It is the owner's duty to make sure that the property is adequately insured. If there is a mortgage on the property it is often a legal obligation to keep this valuation updated. There are also legal ramifications where adjoining properties may be affected.

A Buildings Replacement Valuation on its own is not usually expensive, depending upon a number of factors. It is invariably incorporated into the typical services provided by a Chartered Surveyor subject to client agreement, whether an Acquisition inspection is required or more detailed building inspection is undertaken.