Why Is A Rebuild Cost Assessment Important?
When you first buy a property or block of flats, your first thought isn’t normally, “what do I do if it’s damaged?” However, if you are investing a large sum of money, then it is a good idea to make sure that you have adequate buildings insurance. One way to do this is as part of a thorough property risk management plan including a rebuild cost assessment.
Save Yourself Some Money
Underinsuring a block of flats can be a common issue landlord’s face. This is a major problem and could severely impact you if your block of flats needs to be rebuilt. By completing a rebuild cost assessment you are assessing how much your block of flats would be to completely rebuild from the ground up. This includes labour costs and materials but also the costs you might not immediately think of such as debris removal of the current structure and architect plans. This is crucial is as you can only claim on your flats insurance for the amount that your policy states the building is insured for.
For example, if you have insured your building for £750,000 but at the point of the claim being made, it is calculated at £1,000,000 to rebuild, then you will only be paid 75% of the claim value. In this instance, you’d be £250,000 out of pocket! This theory doesn’t only apply to complete rebuilds, it will apply to even the smallest claims too. So, if you have a burst pipe and a surveyor visits the property and calculates that you are underinsured, they can suggest your claim payment is reduced accordingly as you won’t have been paying the correct premium for the risk.
With inflation and the cost of materials rocketing, we would suggest that you get your property surveyed every 2 or 3 years to calculate an accurate rebuild cost for insurance purposes. They will be able to assess everything from the roof, all the way to the fixtures and fittings, to ensure that you can fully account for repairs. This valuation will impact your flats insurance policy as it means that as your insurance broker, we can use this information to create a policy tailored to your property. You may find that you have be over insuring or under insuring for a long time. To ensure you are paying the right premium for your block of flats insurance, speak to us and we can help arrange a discounted rebuild cost assessment for you.
Improve Your Property Risk Management
Not only does a rebuild cost assessment improve your flats insurance cover, but it can also help with property risk management. It is recommended that you complete one of these assessments every three years as a minimum. If you are taking on the block of flats from a previous owner, it is good to complete this kind of survey as it’s completely different to what you might conduct in the surveys whilst buying a property. Doing so will highlight what you need to insure the property for and the property insurance may be mandatory as part of any loan arrangements you may have.
A rebuild cost survey helps with underinsurance, but by highlighting problems and dealing with them you are much less likely to need to rebuild completely. Therefore, you won’t disturb tenants by removing them from their homes and will maintain a positive relationship with them. We highly recommend keeping up with your property maintenance and jumping on minor issues before they can turn into major problems.
At Flats Direct, we provide quality advice for block of flats owners and can find you the right cover at a great price. As respected building insurance brokers, we are happy to discuss the level of cover you need and ensure you get a thorough rebuild cost assessment. For a tailored flats insurance quote, contact us and speak to one of our team.