The Importance of an RCA (Reinstatement Cost Assessment)

An RCA is the RICS (Royal Institution of Chartered Surveyors) method for completing an appraisal of a property, and any plant/machinery within it, for insurance purposes.

The term reinstatement indicates to repair, reconstruct, or renew assets to a condition equal to but not better than when the property was new.

An RCA is important as it is crucial to ensure you have the correct level of insurance cover for your property. It is unfortunately common that poorly managed property can either be underinsured (leaving you exposed to potential costs in the event of a claim) or over insured (causing unnecessarily high premium costs).

RICS recommends that a full RCA is carried out every three years. If any alterations or major works which may change value of the property are completed, an RCA should be completed following these.

It is critical that an RCA provides the full cost of demolition and rebuilding, together with any other allowances required by the lease terms, so the property owner/manager can arrange the appropriate level of insurance cover.