Building Reinstatement Cost Assessment (BRCA)

A building reinstatement cost assessment (BRCA), also commonly referred to as a building reinstatement valuation (BRV), is one of the most important valuations a property owner or manager can commission, yet it is also one of the most frequently overlooked. An accurate BRCA ensures that your building insurance reflects the true cost of rebuilding your property from the ground up in the event of a total loss. Without one, you risk being significantly underinsured.

SRVO provides RICS-compliant building reinstatement cost assessments for residential and commercial properties across the UK. Our experienced surveyors deliver accurate, well-documented assessments that give you and your insurers confidence that your building is properly covered.

What is a Building Reinstatement Cost Assessment?

A building reinstatement cost assessment calculates the estimated cost of completely rebuilding a property in the event that it is destroyed, for example, by fire, flooding, or structural collapse. This figure is not the same as the property’s market value. In many cases, the reinstatement cost is significantly higher than market value, particularly for older buildings, listed properties, or buildings with unusual construction.

The BRCA figure is used to set the sum insured on a building insurance policy. If the sum insured is lower than the actual reinstatement cost, the building is underinsured, and in the event of a claim, the insurer may apply an averaging clause, meaning you bear a proportionate share of any loss yourself.

Why is a BRCA Important?

Underinsurance is more common than many property owners realise. RICS research has consistently found that a significant proportion of commercial and residential buildings across the UK are underinsured, often by a substantial margin. The consequences of underinsurance in the event of a major claim can be financially devastating.

A BRCA carried out by a RICS-accredited surveyor provides an objective, professionally prepared assessment of reinstatement cost. It gives you the evidence base to set an appropriate sum insured and to defend that figure to your insurer.

What Does Our BRCA Service Include?

SRVO’s BRCA service includes:

• A physical inspection of the property by a RICS-accredited surveyor
• Assessment of construction type, specification, age, and condition
• Measurement of gross external floor areas
• Calculation of reinstatement cost using current BCIS data and professional judgement
• A written report documenting the assessment methodology and findings
• A recommended sum insured figure
• Advice on reassessment frequency

We work to RICS guidance and use current building cost indices to ensure our assessments reflect the prevailing cost of construction at the time of the assessment.

Who Needs a Building Reinstatement Cost Assessment?

A BRCA is relevant to a wide range of property types and clients:

• Residential blocks, freeholders, RMCs, and managing agents
• Commercial properties, landlords, occupiers, and managing agents
• Mixed-use buildings
• Listed buildings and heritage properties
• Properties with unusual construction or specification
• Any property where the insurer requires evidence of the reinstatement cost

For residential blocks, the cost of a BRCA is typically recoverable through the service charge as a legitimate management expense, and our service charge apportionment team can advise on how it is allocated across leaseholders.

How Often Should a BRCA Be Carried Out?

RICS recommends that a full BRCA is carried out every three to five years, with interim desktop reviews in intervening years to account for changes in construction costs. A new BRCA should also be commissioned following any significant change to the property, for example, an extension, a major refurbishment, or a change of use. Where works of that scale are being planned, our contract administration team can manage the programme and flag the point at which a reassessment is needed.

Given the significant increases in construction costs seen in recent years, many properties that have not had a recent BRCA are now materially underinsured. If your last assessment is more than three years old, it is worth reviewing.

Why Choose SRVO for Your BRCA?

SRVO’s surveyors are RICS-accredited and experienced in carrying out building reinstatement cost assessments across a wide range of property types. We take a thorough, evidence-based approach and produce clear, well-documented reports that stand up to scrutiny from insurers and their advisers.

To commission a BRCA for your property, or to discuss your requirements with one of our surveyors, contact SRVO today.

What is an averaging clause?

An averaging clause is a provision in most building insurance policies that applies when a property is underinsured. If the sum insured on your policy is lower than the true cost of rebuilding the property, the insurer will only pay a proportionate share of any claim. A building insured at 70% of its true reinstatement cost will receive 70% of any valid claim, regardless of the size of that claim.

On a large residential block or commercial building, that shortfall can run to hundreds of thousands of pounds. The responsible person is left to fund the difference.

A current, independently prepared BRCA is the most reliable protection against this position.

To find out more or to discuss your requirements, contact the SRVO team today.