Smart Application for Building Maintenance Tracking
Smart Application for Building Maintenance TrackingFree trial

What is meant by the value of the replacement cost?

femme dossier

What is meant by the value of the replacement cost?

What is meant by the value of the replacement cost? All building owners must take out insurance to protect their real estate assets in the event of a loss, total or partial. Since premiums are based on the amount of coverage needed, this must be determined precisely. Thus, the amount of insurance taken out should correspond to the replacement value of the building.

The replacement cost new is the substitution cost required to construct, at current prices, a building of a utility equivalent to that evaluated, using similar and modern materials, according to current standards, concepts and methods of development.

In fact, it is the result of estimating the amount of money that would normally have to be disbursed to acquire the buildings which are the subject of the appraisal in new condition, at a specific date and at the where they are. This value or cost as new should include: labor, materials, professional fees, plans, overheads (demolition, reconstruction, cleaning and contractor fees) plus applicable taxes. The value of the land is not included.