RICS-regulated guide
Building reinstatement cost, explained.
What it means, how it is calculated, and why an accurate figure is the single most important number on your buildings insurance policy — from a practice that does nothing else.
What it is
The cost to rebuild — not what it’s worth.
A building reinstatement cost is the amount it would take to rebuild a property from the ground up if it were completely destroyed. It has nothing to do with the property’s market value or what you paid for it — land and location are stripped out entirely. What remains is the true cost of construction: labour, materials, professional fees and everything the law now requires you to do when you rebuild.
This figure is what your buildings insurance sum insured should be based on. Get it right and a total loss is fully covered. Get it wrong — usually too low — and you carry a shortfall you may not discover until you claim.
What it includes
More than four walls and a roof.
The full rebuild
Rebuilding the entire structure from foundations up — walls, roof, floors and services — to today’s standards, not simply repairing damage.
Demolition & debris removal
Safely clearing and disposing of what remains after a total loss, which must happen before any rebuilding can begin.
Professional & design fees
The architects, engineers and surveyors needed to design and sign off the rebuild — often 10–15% of the total.
Regulations & inflation
Meeting current building regulations and allowing for construction costs rising while a claim is settled and the work is done.
How it’s calculated
From floor area to final figure.
Step 1
Measure the building
A surveyor establishes the gross internal floor area, construction type, age and any non-standard features.
Step 2
Apply live cost data
Current BCIS build-cost rates for the property’s location and type are applied to the measured floor area.
Step 3
Add the essentials
Demolition, professional fees, outbuildings, boundaries and an inflation allowance are added to the base build cost.
Step 4
Produce the figure
A RICS-regulated, broker-ready sum insured is documented and ready to present to your insurer at renewal.
Why it matters
Get the number wrong and your claim shrinks.
Research across the UK insurance market consistently finds that the large majority of buildings are underinsured — often by 20% or more. It happens quietly: a sum insured is set once, then rolled forward year after year while real build costs climb.
The catch is the condition of average. If you are insured for less than the true reinstatement cost, the insurer can reduce every claim by the same proportion — so a property insured for 80% of its rebuild cost may see even a small claim cut by a fifth. An accurate, regularly reviewed building reinstatement cost is the only reliable protection.
Get your figure
Three ways to establish your reinstatement cost.
Desktop Assessment
A fast, remote RICS figure for standard houses, flats and commercial units anywhere in the UK.
Learn more arrow_forwardlocation_onOn-Site Survey
A full site visit for listed, complex or high-value buildings where detail matters.
Learn more arrow_forwardshield3-Year Protection Plan
A full assessment plus three years of BCIS-indexed annual updates to keep the figure current.
Learn more arrow_forwardFrequently Asked Questions.
Common questions about building reinstatement cost and how it is assessed.
What is a building reinstatement cost?
A building reinstatement cost is the total cost of rebuilding a property from scratch if it were destroyed — including demolition, debris removal, professional fees and compliance with current building regulations. It is not the market value or the purchase price, and it is the figure your buildings insurance sum insured should be based on.
How is a building reinstatement cost calculated?
A RICS-regulated surveyor measures the property’s gross floor area and construction type, then applies current build-cost rates from live BCIS (Building Cost Information Service) indices. Allowances are added for demolition, professional and design fees, outbuildings, boundaries and inflation over the rebuild period to reach a defensible total.
Is the reinstatement cost the same as the market value?
No. Market value reflects what someone would pay for the property, including the land and location. Reinstatement cost is purely the cost of rebuilding the structure. In many areas the two figures differ significantly — which is why insuring at market value usually leaves a property under- or over-insured.
How often should a building reinstatement cost be reviewed?
RICS guidance is to obtain a full assessment at least every three years and to index-link the figure annually in between. Build costs move quickly, so a figure that was accurate at the last renewal can drift materially out of date within a year or two.
What happens if my building reinstatement cost is wrong?
If the sum insured is lower than the true rebuild cost, most policies apply a “condition of average” and reduce any claim by the same proportion you are underinsured — even for a small, partial loss. An accurate RICS assessment removes that risk and gives you a figure you can stand behind at renewal.