An Insurance Appraisal commonly known as a Replacement Cost Appraisal is the estimated cost to replace the existing building (including services, mechanical & electrical equipment, and siteworks) using new materials and current standards of construction, with a building (including services, mechanical & electrical equipment, and siteworks) of the same configuration and utility as existed just prior to an insurable loss. All applicable costs – design, permitting and fees, labour, materials, project management, contractor’s profit & overhead, freight, taxes, and insurance are included in the estimate, as are costs for demolition and removal of buildings and equipment damaged or destroyed by the insurable loss.

The purpose of the replacement cost appraisal report is to provide an estimate of the Replacement Cost for the building, which will be used to support an application for insurance coverage for the property. It is important to have an accurate appraisal for the following reasons.

  • Sufficient insurance coverage in case of a total loss of the building due to a fire or other unexpected event.
  • An accurate appraisal ensures you are paying the correct amount for insurance and not overpaying or underpaying on your premium.
  • Without a current appraisal, the property may be subject to a co-insurance clause. This requires the owners to self-insure a percentage of the building.
  • Compliance with provincial legislation acts.

The scope of services provided is summarized in the following bullets: 

  1. Review design drawings and specifications, previous reports, appraisals, building condition assessments etc. provided* by the owner – this is intended to assist with our understanding the various building systems including structural, envelope, mechanical and electrical components.
  2. Conduct a visual (non-intrusive) examinationof the overall building assemblies.
    [The assemblies and components reviewed include, roofs, exterior walls, windows, balconies and decks, exposed-column construction, overhangs, gutters and down-pipes, planters, all interior components, mechanical and electrical components, site components, below-grade structures, and any accessory structures.]
  3. Calculate gross floor area of the building based on the architectural drawings as supplied.
  4. Inventory and describe any yard improvements.
  5. Calculate the replacement cost of the building using Quantity Surveying costing methods, Marshall and Swift Cost Estimator, & other appropriate sources. (AWQS also uses in-office comparable Quantity Surveying methods to calculate the replacement cost of buildings.)
  6. The scope of work excludes planned (future) improvements to the building. The replacement cost appraisal report focuses strictly on replacement of current common elements.
  7. Assemble a Summary Replacement Cost Appraisal Report – for presentation to, and review with, the owners.