Remote insurance valuations ‘the new normal’
Will Molland BSc MCIOB AssocRICS, of property reinstatement cost experts RebuildCostASSESSMENT.com, highlights how the COVID-19 crisis has fuelled an upsurge in demand for remote property insurance valuations.
Nine out of every ten properties in the UK are insured for the wrong amount. The majority, around 80 per cent, are underinsured and on average covered for just two thirds of their correct insurance value.
Properties owned by landlords are often subject to what is known as the ‘Average Clause’, which can lead to claims payments being significantly reduced if underinsurance is found. Imagine having to fund one-third of the total cost of repair or rebuild of your property, despite having paid for insurance!
It is the landlord’s responsibility to make sure their property is covered for the correct ‘reinstatement cost’ or ‘rebuild value’ – in other words, the amount the property would cost to rebuild from scratch. However, this is by no means an easy figure to come up with.
As such, landlords are advised to commission a reinstatement or rebuild cost survey from a professional, such as a chartered surveyor, who traditionally would visit the property in person. However, as is the case with market valuations, many property insurance valuations are now being completed remotely using a ‘desktop’ approach. Hamilton Fraser Total Landlord Insurance advise that you get a professional property valuation carried out every five years.
At RebuildCostASSESSMENT.com we have been pioneering desktops assessments, which are quicker, more affordable and leave little or no carbon footprint. And more recently we’ve seen a significant upsurge in demand due to the COVID-19 crisis.
Private rental property requests for desktop Rebuild Cost Assessments (RCAs) more than doubled in little over a month following the March lockdown, up by 129 per cent to the end of April. Because of safety fears, site surveys were not possible for a time, and despite lockdown being eased the shift from site assessments to desktop has continued.
It appears remote insurance valuations are becoming part of the ‘new-normal’ with many who previously shied away from, or were somewhat sceptical about digital processes and solutions, changing their minds.
Any scepticism that remains tends to now stem from misconceptions around what a desktop assessment really is. There is a perception that desktops offer no more than a cursory measurement of a property and a quick application of rebuild rates, with little in the way of real expert evaluation. However, this is far from the truth. As an organisation that is ‘Regulated by RICS’ we have professional standards to uphold, using the data and information we gather on properties to identify an array of features that can have a significant impact on reinstatement value.
Difficult access, restricted sites, low bridges and weight limits can all delay rebuild projects and add to expense. Bespoke joinery, either internal or external, can be expensive to replace or repair as can stained glass, large format glazing, hardwood frames, wide opening sliding or bifold doors, and triple glazing. With many of these features requiring bespoke manufacture, costs can be much higher than off the shelf fixtures.
Desktops should never be confused with some kind of faceless automated calculator. They’re produced by property professionals who never adopt a one-size fits all approach.
For a limited time only, RebuildCostASSESSMENT.com are offering Hamilton Fraser readers an exclusive 20% off the cost of a single desktop RCA. Use code ‘TOTALLANDLORD20’ when checking out at www.rebuildcostassessment.com/landlords by 17 July 2020 and pay just £127.99 incl VAT for a comprehensive and professional RCA report on your property.