ABSTRACT
The problem of adequately covering by insurance the loss and damage caused to buildings by fire and other perils has been highlighted in recent years by the increasing rate of inflation. There are a number of schemes available to the building owner wishing to insure his property against the usual risk. Traditionally the insured value must be sufficient to cover the actual cost of reinstating the building. The Present Cost when established will usually, under the conditions of the policy, be the rebuilding cost on the first day of the policy period. To this must be added a sum to cover future price increases over the period of the policy. For this purpose, using the historical indices as a base and taking account of the likely change in future building costs and the tender climate, an anticipated re-build cost can be arrived at.
