Insurance Valuations



Gross Current Replacement Cost/ Insurance Value

This is the estimated cost of replacing the existing permanent improvements with structures of the same dimensions, materials and finishes through an independent and suitable contractor and including professional fees. The value does not include any allowance for land, finance charges, loss of rental, plant, machinery, fixtures or fittings.

Site clearance/demolition costs and escalations during the rebuilding period are also excluded. These figures may be stated separately in the individual valuation report as a below the line item. Our valuation presumes that the foundations to the buildings are normal foundations erected upon stable ground for the types of structure and excludes any additional costs for extra excavation, piling or reinforcement.

The Gross Current Replacement Cost valuations reflected in our reports are net with no VAT added.


Gross Current Replacement Cost/ Insurance Value

We define the Gross Current Replacement Cost or Estimated New Replacement Cost as the minimum estimated cost or amount that would have to be capitalised in the normal course of business in order to obtain an asset of equivalent operating capacity.

The Gross Current Replacement Cost would incorporate, inter alia, all necessary cost components to include import duties, levies, engineering and commissioning.

In certain cases, estimates may be based on an alternative technology approach but this aspect would be discussed with your engineering manager prior to finalisation.

Included would be an estimate for machinery dismantlement / demolition and scrap removal.


What is clear is that a valuer undertaking ‘insurance valuations’ must define his approach so that both the insurer and / or client can determine if the estimate provided meets their requirements. This may additionally require inclusion of demolition costs or VAT for the full sum insured.

We can further assist our clients during valuation cycles with exchange rate changes and building cost inflation amounts so that they ensure these costs are kept up to date.


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