In 2012, Building Cost Information Service (BCIS) conducted research into under-insurance in commercial property. Results confirm that despite regular reminders, as many as 80% of commercial buildings are still under-insured.

Coinciding with the launch of BCIS's commercial property rebuilding calculator, this was a stark reminder that if shortfalls in reinstatement claims are to be avoided, regular reassessment of property value is vital.

Morag Keohane, Caxtons' insurance manager, says: "Unfortunately too many property owners rely on the building value to be index linked and allow the value to go unchecked year on year.

"We also see many purchasers relying on the value the vendor insured the property for without confirming if this is correct, or adopting the asset value as the reinstatement cost.

"This means that insurance companies will not have accurate details regarding the value of the building and any claims may therefore be subject to average if a property is under insured.

"Carrying out regular valuations is essential to ensure property owners are not left out-of-pocket should they need to make a claim in respect of their property."

The Royal Institution of Chartered Surveyors (RICS) recommends that a reinstatement cost assessment (RCA) should be carried out at a minimum of every three to five years. Property owners' insurance policies make it a policy condition that regular valuations are carried out by a RICS qualified surveyor, normally every three years, although this depends on the insurer.

In a recent on-line article published by RICS they said: "The Insurance Act, which came into force in August 2016, contains important changes, which those in the

property sector should be aware of. Insurers do not need to rely on their policy wordings to reduce the costs of claims as they will be able to proportionately reduce these due to non/inaccurate disclosures. Therefore, the duty to provide a fair presentation of risk should be given the utmost care and consideration to ensure that the property at risk is accurately presented to insurers to avoid any detrimental settlement adjustments."

There are two types of policy cover. A building can be insured on a 'reinstatement basis' where the amount of indemnification is determined by the cost of repair or reconstruction at the time of the loss rather than at the start of the insurance period. This means the sum insured at the start of the insurance year must include an adequate allowance for inflation both during the insurance period and during the rebuilding period, which may be longer.

The alternative is 'day one reinstatement basis' method, where the actual rebuilding cost is set as at the first day of the insurance period. Inflation is included automatically in the policy. This represents good value for money as the insurer may only charge, for example, 5% of the full rate for an inflation provision of 30%.

For information and assistance with the preparation of Insurance Reinstatement Cost Assessment Valuations, contact Mark Laherty, head of our Building Consultancy Department; on 01474 330960 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

For advice on property owner's insurance contact Morag Keohane on 01474 537733 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Caxtons Commercial Limited is an Appointed Representative of Morrison Edwards Insurance Services Limited which is authorised and regulated by the Financial Conduct Authority.

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Morag Keohane

In 2016, Highways England consulted on a new Lower Thames Crossing and received more than 47,000 responses, indicating the level of interest in the project.

Subsequently, the Secretary of State announced that the preferred route is to be a tunnel beneath the River Thames, between Gravesend and Tilbury. The tunnel will be supported by new infrastructure linking to the M25 between junctions 29 and 30 in the north and to the A2 east of Gravesend in the south.

The purpose of the new route is to ease frequent logjams and increased traffic at the Dartford Crossing - in the tunnel, carrying traffic from Kent into Essex, and on the QEII Bridge for traffic en route to the south.

The original crossing opened in November 1963 and was a single carriageway tunnel and cost sixpence (6d) to cross.

The crossing was popular and, with demand rising, a second tunnel was planned, approved and work

commenced in 1971. However, due to a number of delays including a public enquiry, it didn't open until 1980 when both tunnels provided a dual carriageway between Kent and Essex.

During the 1980s the completion of the M25 had added to an existing and projected level of traffic using the tunnels and a third crossing was proposed and approved and eventually the QEII Bridge opened in October 1991.

And still the traffic increased.

It is anticipated that the new Lower Thames Crossing will, according to Chris Taylor
Director of Complex Infrastructure at Highways England, "...unlock billions of pounds worth of economic benefit and create thousands of jobs.

The estimated cost for construction is between £4.4 and £6.2 billion and a start date is yet to be agreed – but it will offer an alternative route "....providing more than 70%

additional road capacity....", "....improved journeys, open up new connections and (strengthen) network reliability...". (http://roads.highways.gov.uk/projects/lower-thames-crossing/)

"The decision on the preferred route marks a significant step forward in the scheme's development. We will now move forward with the design and assessment, which includes more detailed environmental surveys, air quality and noise impact assessments and traffic modelling before consulting you again on a more detailed scheme."

No doubt there will be objections and delays but it seems that sometime in the foreseeable future we may be experiencing reduced congestion in and around the Gravesend to Dartford area – which is something to look forward to.

To keep in touch with the progress of the project visit the dedicated website at www.lower-thames-crossing.co.uk.

Dr Thérèse Coffey MP, Parliamentary Under Secretary of State for the Environment and Rural Life Opportunities, recently met with the British Property Federation (BPF) at which the topic of discussion was owners not included in the property Flood Re scheme.

Flood Re, which was developed by the insurance industry and government, came into effect in 2016. It provided solutions for residential property owners at risk in high flood prone areas but excluded cover on certain properties types such as blocks of flats, buy-to-let, commercial property, and residential property built after January 2009. This impacted leaseholders, landlords, many SMEs and residential owners in newer properties who found themselves facing two options - prohibitively costly property insurance or no insurance at all.

Some insurers chose not to participate in the scheme, but many of the everyday names opted-in to the scheme thereby providing a range of affordable policies for residential owners in need of flood cover.

One year on, the British Insurance Broking Association (BIBA) has unveiled an insurance policy specifically for SME owners of commercial, leasehold and buy-to-let property in flood risk areas, which will provide them with more affordable and adaptable tailored cover.

Due to the use of clever mapping software, each property can be successfully located, assessed for individual risk of flooding and the premium would be set accordingly. Policyholders can then decide on the level of 'excess' they wish to pay in the event of any claim, thus making the scheme particularly adaptable and affordable.

David Gurton, Director and Head of Insurance at Caxtons said: "We are delighted to be able to offer this new surety of affordable buildings insurance to property owners in flood risk areas who wish to insure their commercial premises, blocks of apartments or buy-to-let properties through the Pi-Property scheme that we can now provide.

"At the time Flood-Re was launched, we acknowledged the injustice where certain categories of property owners, who because they owned in areas of higher flood risk such as Yalding (particularly badly affected by floods in early 2000) were unable to afford suitable building insurance cover. Now that issue has been addressed and we welcome this restorative step forward.'

For more information contact Morag Keohane in our Property Insurance department on 01474 537733 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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Morag Keohane