Blog Question: Extra Cost of Reinstatement

Hi Allan, 

I am after some advice concerning older buildings and (non existent) open air hardstand areas. 

  • Their land size may be big enough to cater for, but because of the buildings age they do not have designated concreted or sealed car parks. 
  • Or their site size may not allow for in the event of a rebuild after a total loss. 

Understandably building regulations have now changed and local councils require new commercial properties to have adequate sealed open air hardstands for their size.

Where do we allow for such and how do we calculate a sum insured?  Can we insure for property that currently doesn’t exist?

I look forward to hearing back from you.


Leesa [Surname and Email provided]


My reply was:

Hi Leesa

First up top marks for identifying the risk.

With the sum insured / declared value you only should include the current replacement value of what was there. You do not include the extra cost of reinstatement (under most policies).

This is insured separately as a first loss (not subject to average) sub-limit.

On what this value should be you may need to involve a town planner to advise on the current requirements and then a good local builder or quantity surveyor to cost it.

I  hope this helps.


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