By

As part of our ongoing series answering your frequently asked questions, the expert surveyors at Charterfields have created this guide to help you better understand insurance valuation reports. 

Understanding current reinstatement costs is key to ensuring adequate insurance coverage and avoiding financial risks. Our team specialises in providing businesses around the world with comprehensive insurance assessment reports to help clients make informed decisions.

With extensive experience in reinstatement cost assessments, as well as financial valuations, we help businesses and stakeholders across various sectors manage risks effectively. Read on to find out exactly what to expect from an insurance valuation or reinstatement cost assessment report.

What is an insurance valuation report?

Also known as a reinstatement cost assessment, an insurance valuation report provides a professional assessment of the cost required to reinstate or replace an asset or facility in the event of total loss. 

These reports ensure that your business’s property damage insurance coverage aligns accurately with the property’s reinstatement value, preventing under insurance or wasted premiums due to over insurance.

Why might I need an insurance valuation report?

Insurance valuation reports are essential for helping businesses and property owners to achieve the following:

  • Ensure adequate coverage of assets
  • Avoid financial risks associated with underinsurance
  • Assess reinstatement costs across separate locations, buildings and assets
  • Provide insurers with independent confirmation of declared values
  • Appropriately allocate values to match with policy terms
  • Support insurance claims with clear documentation

What does an insurance valuation report include?

A comprehensive insurance valuation report will typically include: 

  • A commentary on the general nature of the assets assessed 
  • A statement of the basis adopted and the date of assessment 
  • Information about the nature and source of any information relied upon
  • Commentary on the extent of inspection, assumptions and restrictions
  • A methodology statement covering the approach
  • An opinion of assessment, with appropriate analysis by location
  • The allowances made for the estimated costs of professional fees, demolition and debris removal
  • Provision for VAT, if applicable
  • A statement of the estimated maximum period of reinstatement in the event of a total loss occurring, and 
  • A location map or plan

Where contents are assessed, and if agreed during the proposal stage, a report can also include an inventory of the major assets to assist with asset management and maintaining accurate declared values in the future.

What information do I need to provide to the surveyor for the report?

To facilitate an accurate assessment, the surveyor will typically require site and building plans so that they can determine the extent of the assets to be considered. Most professional surveyors will validate this information since ‘as built’ measurements can regularly differ from plans held by clients.

For contents assessments, a copy of the financial fixed asset register is helpful. For more complex locations equipment lists, P&ID documents, schematics and details on major process equipment are useful.

Cost data for any construction projects completed in the past three years and information covering future planned capital building/equipment projects may also be helpful.

Recent asbestos surveys, which confirm the location of any asbestos containing materials, is also useful since this could have an impact on expected demolition and debris removal costs. 

If you’re not sure what information to share ahead of the insurance valuation report, our team is more than happy to help ensure you’re as prepared as possible so no stone is left unturned – and the risk of unexpected costs is kept to a minimum.

How long does the assessment process take?

The length of time it takes to complete an insurance valuation assessment depends on the size and location of the facilities being evaluated. Typically, this process takes between 6 and 12 weeks from the initial inquiry to the final report submission.

How do you prepare the report?

Our expert surveyors follow a structured methodology to prepare the report:

  1. Initial consultation – Understanding your requirements and gathering preliminary data
  2. Site inspection – If a site inspection is required, conducting a thorough physical inspection and verifying data provided
  3. Data analysis – Reviewing collected information and applying valuation methodologies
  4. Report compilation – Documenting findings and producing a detailed valuation report.
  5. Final review & submission – Ensuring accuracy and clarity before delivering your final report.

How often should I update my insurance valuation report?

It is recommended to update your valuation every three to five years, or sooner depending on any significant changes to your assets. Changes might include construction cost inflation, renovations, expansions or changes in regulations. For plant and equipment, physical movement of assets can quickly change values between sites or buildings. These factors can all impact reinstatement costs, making periodic updates essential for ensuring your coverage remains accurate.

Does an insurance valuation report include depreciation?

No, an insurance valuation report does not include depreciation. Unlike market valuations, which may factor in depreciation, insurance valuations focus only on the cost to reinstate or replace an asset at current prices. The goal is to ensure that policyholders have sufficient coverage to rebuild or restore their property without financial shortfalls.

Are there specific industry regulations or guidelines I need to follow?

Yes, insurance valuations can be impacted by industry-specific regulations and guidelines, for example current building codes. Compliance requirements vary depending on factors such as asset type, sector, and location. 

Here are some of the key regulations and guidelines that can impact reinstatement costs and hence UK insurance valuations:

  • The Building Regulations 2010, which governs construction and renovation standards to ensure safety and energy efficiency
  • The Regulatory Reform (Fire Safety) Order 2005, which sets out fire safety responsibilities for businesses and property owners
  • The Control of Asbestos Regulations 2012, requiring asbestos management plans which can impact demolition and reinstatement costs.
  • The Construction Design and Management (CDM) Regulations 2015, which establishes duties for safe construction and maintenance planning. 
  • Building Safety Act 2022, which is designed to improve the design, construction, and management of higher-risk buildings, focusing on structural and fire safety risks. 

Our surveyors at Charterfields ensure that valuations address the latest industry standards and best practices.

Insurance valuation vs market valuation – what’s the difference?

Understanding the difference between values used for insurance and market value is key to getting your declared values correct. Most insurance policies are written on a reinstatement basis, meaning that declared values should represent the cost on a ‘new for old’ basis, of reinstating the assets like for like.

Market valuations represent what an asset would transfer in a sale, and takes into consideration factors like location, demand, and potential income generation, and the land on which the property sits. This may have no bearing on insurable values, for example a historic textile mill may cost tens of millions to rebuild but may have a much lower market value due to its location, configuration, high maintenance costs, etc. Alternatively high end residential tower blocks in London may transact at a multiple of their reinstatement cost. 

Can I use the insurance valuation report for other purposes?

As mentioned above, insurance valuations are not the same as market valuations, and the inclusions and exclusions can differ from valuations required for other purposes. Accordingly, these reports are specific to insurance placement.

That said, the the gathered data can have additional benefits for clients including:

  • Verifying building details and asset documentation.
  • Providing photographic records for reference.
  • Supporting asset management and financial reconciliation.

These insights can prove valuable for broader business planning and operational efficiency.

For more details please get in contact

At Charterfields, we provide clear, accurate and comprehensive valuation reports to support owners, risk managers, insurance brokers, insurers and reinsurers in managing their assets effectively. If you have further questions or need an insurance valuation assessment, get in touch with our team and we’ll be happy to help.

You’ll find more information to your frequently asked questions about insurance valuations throughout our FAQ series: