As a property owner in a communal building, you and the other owners have a collective responsibility to insure the building to a sufficient level for reinstatement.  

A Reinstatement Cost Assessment (RCA) is a survey conducted by a qualified surveyor to estimate the cost of fully rebuilding your property if it were severely damaged.

Although such accidents are rare, in the case of a fire or major structural event this assessment covers the expenses for demolition, debris removal, temporary housing, professional fees, and any rebuild costs. 

 

An accurate reinstatement cost significantly impacts your building insurance premium. It ensures you are properly insured, avoiding excessively high premiums or, worse, being under-insured. 

For example, in a typical building, being over-insured by £1 million could raise your premium by £1,000 annually. On the other hand, being under-insured poses a serious financial risk. If your building’s insurance covers a reinstatement cost of £2 million but the actual cost would be £2.3 million, any payout may be proportionally reduced. In this case, you would only receive £1.7 million, leaving property owners to cover a shortfall of £600,000. This could make it impossible to fully restore the property—a devastating situation for owners. 

 

Construction and material costs can vary over time, so it’s essential to regularly update your reinstatement cost. The Factors Code of Conduct advises an RCA every five years, while RICS and some insurers recommend one every three years. 

For years when an RCA isn’t completed, the reinstatement cost is typically adjusted according to official inflation rates, helping to keep your coverage accurate. 

 

Our basic rule of thumb when seeking value for block insurance is to take the declared value, established by the RCA as described above, and to divide that by 1,000. In insurance circles, that rate is known as the 10p rate and is the target that we issue to our panel of insurance brokers when we are putting a policy in place for you. So, if the declared reinstatement cost value of your building is £4 million. The cost of your insurance should be £4,000, divided into the shares for the individual properties within your building. 

 

7days can help you secure the right cover at the best value.

By ensuring your RCA is accurate and up to date, we work with trusted insurance brokers to negotiate lower premiums — without compromising on protection.

Our goal is simple: make sure you’re paying the right price for the right level of cover.

Keeping your RCA current is one of the easiest and most effective ways to protect your building and your finances. It ensures fair premiums, full coverage, and peace of mind that your property can be rebuilt if the unexpected happens. Our friendly team can help get you the best valuation.

For more guidance, visit the RICS website