REBUILD INSURANCE COST ASSESSMENT CALCULATION
A Rebuild Insurance Cost Assessment Calculation estimates your property's likely rebuilding cost for buildings insurance purposes. This up-to-date estimate is typically used when purchasing a property to ensure the buildings insurance sum insured is set correctly from the outset, rather than relying on a general assumption or the purchase price.
The calculation accounts for key property characteristics including location, type, age, approximate gross external area, height, shape and construction, gathered during the survey inspection. This helps ensure your cover is neither too low nor unnecessarily high.
Why It Matters
Buildings insurance should be based on an appropriate estimate of rebuilding cost. If the declared figure is too low, the property may be underinsured, potentially leaving the owner financially exposed following a significant claim.
Rebuilding costs also change over time. Construction labour, materials and professional fees respond to market conditions, and changes to Building Regulations can affect the cost of rebuilding older properties. Relying solely on a historic figure, or assuming that annual index-linking alone will keep cover adequate, may not be sufficient.
What Is Included?
We review the available information about your property and apply the relevant BCIS residential rebuilding cost data to produce an estimated rebuilding figure. Depending on the property, this may include allowances for:
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demolition and site clearance;
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removal and disposal of damaged or contaminated materials;
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professional fees, including architects', surveyors' and engineers' fees;
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compliance with current Building Regulations and other statutory requirements;
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construction, labour and material costs;
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external works and landscaping, where appropriate; and
The precise items included will depend on the property and the methodology and assumptions used.
The service is intended as a practical indication of an appropriate rebuilding cost for buildings insurance purposes, useful when purchasing a property, reviewing existing cover, or checking whether your current sum insured remains adequate.
An Estimate, Not a Full Reinstatement Cost Assessment
This Calculation is based on a limited range of property information and standardised BCIS data. It does not involve detailed measurement and valuation of every building element, and should be treated as an indicative estimate rather than a definitive, fully property-specific reinstatement cost assessment.
Rebuild Cost Is Not the Same as Market Value
A common misconception is that buildings insurance value should match market value. These are different figures entirely:
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Market value reflects what a property might reasonably sell for.
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Rebuild cost reflects the estimated cost of reconstructing the property following a total or substantial loss.
In areas with high land values, rebuild cost can be substantially lower than market value. Conversely, properties with unusual construction, complex architectural features, difficult access or specialist materials may carry a comparatively high rebuild cost.
Is This Calculation Right for Your Property?
The Calculation is primarily suitable for standard residential properties such as houses, bungalows and flats of conventional construction, where the rebuilding cost can be reasonably estimated using standard BCIS residential rebuilding cost data.
It may not be appropriate for:
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listed or historic properties;
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properties of unusual or non-standard construction;
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properties with significant or unusual features, or specialist materials;
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properties with extensive alterations or extensions that could materially affect rebuilding cost; or
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non-residential properties.
For properties in any of these categories, we recommend a full professional reinstatement cost assessment, as it provides a more detailed, property-specific basis for determining the appropriate buildings insurance sum insured
Cost-Effective Optional Service for Level 2 and Level 3 Surveys
We can provide an up-to-date Rebuild Insurance Cost Assessment estimate as an additional service alongside our residential surveying work. Choose this service to include it in your survey report, so your buildings insurance is set correctly from the point of purchase.
Frequently Asked Questions
About Rebuild Insurance Cost Assessment
Does my home insurance need a rebuild cost assessment?
Your buildings insurance needs an appropriate assessment of the property's rebuilding cost so the sum insured is sufficient to cover reinstatement following a major loss.
If the declared rebuild cost is too low, you risk underinsurance and potentially insufficient cover if you need to make a claim. RICS guidance emphasises the importance of establishing an appropriate reinstatement figure for insurance purposes.
Some insurers may provide an estimated rebuilding cost as part of their insurance quotation process. However, you may wish to obtain an independent assessment where the property is older, unusual, substantially altered or otherwise likely to require a more carefully considered rebuilding figure.
Is rebuild cost the same as market value?
No, rebuild cost and market value are two very different figures.
Market value reflects what a property might sell for on the open market and is strongly influenced by factors such as location, land value, local demand and the desirability of the property. Rebuild cost is the estimated cost of reconstructing the building after a total loss.
For example, a property in an expensive part of North West London may have a high market value because of its location, while its rebuilding cost could be considerably lower. Conversely, a property with specialist construction or unusual features could have a relatively high rebuilding cost compared with its market value.
Your buildings insurance should therefore not normally be based simply on the property's purchase price or market value.
What is BCIS?
BCIS stands for the Building Cost Information Service. It is a specialist source of construction cost information used by surveyors, insurers and other professionals in the UK built environment.
BCIS provides data and cost models to help estimate residential rebuilding costs. For a rebuild cost assessment, BCIS data provides an important benchmark. The appropriate rebuilding cost needs to reflect factors such as the property's size, construction, location, specification and any unusual or additional features.
Does a rebuild cost assessment include demolition costs?
Demolition and debris removal can be a significant part of the overall cost of reinstating a property after a major loss.
A full reinstatement cost assessment will generally consider appropriate allowances for demolition and debris removal in addition to the cost of reconstructing the building. RICS guidance specifically identifies demolition and debris removal as components of the overall reinstatement cost.
For MaxConsult's Rebuild Insurance Cost Assessment Calculation, the scope and limitations of the service will be stated in your quotation pack and report. Where a property's circumstances mean that demolition, access, hazardous materials or other abnormal costs require a more detailed assessment, a full reinstatement cost assessment may be more appropriate.
Do I need a full Reinstatement Cost Assessment?
Not necessarily. For a conventional house, bungalow or flat with standard construction and no particularly unusual features, an indicative rebuild cost calculation may provide a useful estimate for insurance purposes.
However, a full Reinstatement Cost Assessment (RCA) may be more appropriate where the property is listed, historic, unusually constructed, extensively altered, particularly large or complex, or has significant site constraints.
A full RCA considers a wider range of potential costs and circumstances, including demolition, debris removal, professional and statutory fees, access constraints, neighbouring properties, conservation requirements and specialist materials.
If the property falls outside the scope of MaxConsult's standard rebuild cost calculation, we will explain this before undertaking the service.
Can you calculate the rebuild cost for a listed building?
Listed buildings require particular care when assessing rebuilding costs because reinstatement may involve specialist materials, traditional construction techniques, detailed architectural features and additional planning or conservation requirements.
For this reason, a standard rebuilding-cost model may not be appropriate on its own. RICS guidance specifically recognises that historic and complex buildings may require a more detailed elemental assessment rather than relying solely on average rebuilding rates.
MaxConsult's standard Rebuild Insurance Cost Assessment Calculation is intended for standard conventional properties. If a property is listed, historic, unusually constructed or contains significant specialist features, a full reinstatement cost assessment from an appropriately experienced specialist may be more suitable.
How often should I review my property's rebuild cost?
You should keep your rebuild cost under review because construction costs can change over time.
RICS guidance recommends regularly reviewing reinstatement cost assessments, with annual desktop reviews and more comprehensive reassessments at appropriate intervals, particularly where there have been significant changes to the property.
You should also consider obtaining an updated assessment following substantial extensions, alterations or other changes that could materially affect the cost of rebuilding the property.
Does the rebuild cost include the land?
No. A rebuild cost relates to the cost of reconstructing the building and associated items that need to be considered for insurance purposes. It does not represent the value of the land on which the property stands.
This is another important reason why a property's rebuild cost can be substantially different from its market value.
Can you calculate the rebuild cost for a flat?
Yes, a rebuild cost can be calculated for a conventional flat, although the basis of the assessment differs from that of a standalone house.
For a leasehold flat, responsibility for buildings insurance and the extent of the insured building will depend on the lease and the building's insurance arrangements. In many cases, the freeholder or management company arranges the buildings insurance for the whole building.
If you are a leaseholder, you should check the terms of your lease and the existing buildings insurance arrangements before commissioning an individual rebuild cost assessment.