It is hard to believe that Friday 25th November marks one year since Storm Arwen brought unprecedented and unexpected storm conditions across the UK. The consequential damage was vast and scenes of missing roofs, collapsed walls, flooding, tree damage and power cuts were commonplace.
In the aftermath of Storm Arwen, I was approached by a number of clients who had been refused insurance cover on the basis that they had understated the rebuild cost for their building when they took out their policy. This left many clients having to pay the full cost of repairs or receive only a small proportion of the remedial works cost based upon the proportional value of what was insured.
It was extremely unfortunate and sad to see such events demonstrating the need to have a thorough reinstatement cost assessment completed at the point of insurance renewal or during the policy to ensure cover is in place.
I must stress the word thorough. I have undertaken a substantial amount of reinstatement cost assessments and I have also been able to review the incumbent assessments (if indeed one exists). In every case where I have observed an existing assessment figure or report, they have not been thorough and have not considered abnormal costs associated with rebuilding (eg. Listed status, poor site access, landscaping, special feature, etc). The reliance upon a standard m2 base rate or simply the market value of the property is so common yet this does not meet RICS requirements, represents poor value for money and fails to quantify the rebuild cost for a property sufficiently. The result is invalid insurance coverage.
A quality reinstatement cost assessment is a worthwhile investment as it affords genuine cover for a policy and provides peace of mind. In context, there is no value in insuring a building without a correct reinstatement cost assessment as without this, cover will be invalid and the policy premiums paid will be wasted.
The COVID-19 pandemic, increased materials, labour costs and inflation have all contributed to the increased the costs for rebuild values, therefore if an assessment has not been undertaken within the last year, the likelihood is that the declared reinstatement costs are insufficient.
With the likelihood of significant storm events increasing year on year, I anticipate insurance providers will tighten restrictions further as the quantity of claims rise.
James Cullen | Partner, Building Surveyor
0333 920 2220 Ext 2238 / 07776 683279
How can we help?
At George F. White, we offer clients quality, detailed reinstatement cost assessments and also provide insurance works damage surveys and project management to independently oversee remedial works.
Policyholders have the right to choose their own representation for a claim and my advice is to do this at every given opportunity. This ensures you are independently represented for all insurance works decisions whilst professional fees are covered by your insurance firm. George F. White also offer insurance refusal consultancy services to assist clients in overturning refused claims. We have a proven track record in overturning refused claims on the basis of demonstrating quality, expert witness review and have the benefit of ex insurance claims handlers in house who can scrutinise policies in detail.