2. A presentation to… Trust Professionals Phil Lane BSc(Hons) FRICS MBEng Valuation Services Manager 3 rd December 2010

3. Objective To provide an overview of: Building Reinstatement Costs For Insurance Purposes

4. Introduction Difference between market value and reinstatement value Information to be collated prior to and during the site survey How this information affects the reinstatement value Day one reinstatement valuation Implications of getting it wrong eg. underinsurance

5. What is the Reinstatement Cost of a building? Reinstatement cost definition: The cost of reinstating the specified premises to the existing design to a standard equal to, but no greater or better than, the existing condition, in accordance current Building Regulations and other statutory requirements as may be applicable. Not a Mortgage Valuation

6. Building Reinstatement Costs Calculating the reinstatement cost is a specialised task Not a simple case of applying a £sqm Financial implications

7. Building Definitions For Insurance Building policy definition Check lease documentation for commercial buildings Fixtures and fittings Shell & core of the building External features

8. Site Survey Access restrictions Proximity of site Are any special protection works likely to be necessary?

9. Site Survey Specialist features Floor to ceiling heights Constructional details Does the site slope? Is the building listed or in a conservation area

10. The Calculation Different for Commercial and Domestic properties Domestic properties Large complex domestic properties Commercial and complex structures Additional allowances for listed properties

11. What other costs need to be considered? Demolition & Debris Removal Emergency Shoring & Propping Professional Fees

12. Costs not included Inflationary increases Contents VAT Statutory or other grants or incentives Salvage costs

13. Day One Reinstatement Valuation The cost of rebuilding the whole building Tenants’ improvements that are now the landlord’s Modifications to the design & specification Remainder of the property Demolition & debris removal Professional fees

14. Why Leave It To Chance? Adequacy of sum insured

15. Getting it Wrong Underinsurance Penalties - Average and Indemnity Consequences of underinsurance

16. Underinsurance Penalties Average

17. Listed Country House Hotel

18. Example Country House Hotel (not the one pictured) Purchase price £5,000,000 Original Sum Insured £5,000,000 Reinstatement Cost £12,000,000 Underinsurance 58.3%

19. Underinsurance Penalties Indemnity - the cost of replacement as per the policy definition less deductions for Age, Depreciation, Wear & Tear

20. Statistics Underinsurance – The figures Out of 1,350 completed valuations we identified in excess of £1.1 Billion of underinsurance

21. Getting it Wrong Over Insurance High premiums Not providing best advice

22. Getting it Right Professional Indemnity Claims Best advice Claim process

23. How long is a valuation valid for? 3 years Re-valuation

24. Cunningham Lindsey Valuation Services Our Service Competitive fee structure Desk top revaluations

25. Flats

26. Listed Country House

27. Traditional Office

28. Modern Office

29. Domestic

30. Contacts –Your usual broker at CCV Jersey, or –Tel: +44 (0) 1534 702777 (switchboard) –Fax: +44 (0) 1534 702703 –Email: info@ccvjersey.com