What is an insurance valuation?
An insurance valuation is the assessment of a building’s structure and fittings to provide the re-instatement cost, ie, how much it would cost to rebuilding the building if the land it stands upon were FREE.
Important factors in an insurance valuation are therefore the physical size of the building, the methods used in the buildings construction, ie, solid brickwork, concrete frame with in-fill panels or perhaps in the case of a church solid stone!
When the surveyor visits a property to assess the insurance value they will review what would make the property cost higher than the average building price. For example, is the floor to ceiling height greater than the average 2.1m-2.4m? If so the volume of brickwork/materials would be greater and the Surveyor must factor this in. Other adjustments would be made for landscaping, gates, lifts, location, site conditions etc…
When should I commission an insurance valuation?
Most good leases will provide for an insurance valuation to be carried out at the cost of the leaseholders, after all it is they who benefit from the insurance should the building burn down.
We recommend that the frequency should be at least every 5 years for residential property and every 3 years for commercial property, because the risks of inappropriate insurance are high!
3 reasons why both Leaseholders and Freeholders are at risk if a property is under insured