After the Water: Five Lessons from 2011 on Getting Flood Reinstatement Costs Right
By Killian Jones, Co-Founder & Director, Kildare Cost Management
When floodwater recedes, the pressure is to clean up and reopen as fast as possible. That instinct is understandable, but the decisions taken in the first few weeks often decide whether a claim settles fairly or drags on for months.
Between 2011 and 2014 I was Lead QS for buildings and MEP claims following the Thailand floods, working with Cunningham Lindsey International (now Sedgwick) for major regional insurers across 50 sites and more than 900,000 m² of industrial, retail and logistics property. These are the lessons that mattered most.
1. Record everything before you remove anything
Photograph and video every affected area, including water marks on walls, before stripping out or disposing of anything. Keep samples of damaged finishes, and nameplates from plant and equipment. Once material has gone to the skip, the evidence of what was there, and what condition it was in, has gone with it. Emergency works to make the site safe are expected and usually reasonable, but keep a separate record of them and of their cost.
2. Know your values at risk before the adjuster asks
Most property policies contain an average (underinsurance) clause. If the buildings sum insured is lower than the true reinstatement value at the time of loss, the claim can be reduced in proportion. In 2011, many sites were insured on figures that had not been updated for years.
An independent assessment of the buildings values at risk tells you early where you stand. It also gives you a sound basis for discussions with your broker and the loss adjuster, instead of finding out at settlement.
3. Reinstatement means like for like, not an upgrade
A reinstatement basis pays to restore the building to its condition before the loss, not to improve it. Where an owner takes the opportunity to upgrade, for example to a higher specification of finishes or larger plant, the difference is usually treated as betterment and falls outside the claim.
A clear, priced scope that separates like-for-like reinstatement from owner upgrades avoids the most common source of dispute.
4. MEP damage is rarely visible on day one
Floodwater is hardest on the building services. Switchgear, distribution boards, motors, lift installations, fire alarm and BMS systems can all appear to work after drying out, then fail weeks later. Some manufacturers will not warrant equipment that has been immersed.
Specialist testing is essential before deciding between repair and replacement. So is an early view of replacement lead times: in 2011, imported equipment was the main cause of delay on many industrial sites.
5. Expect prices to move, and document why
After a major event, contractors and suppliers are overwhelmed and prices rise. This demand surge is real, but it has to be evidenced. Competitive tenders, market rate comparisons and a clear audit trail from the damage survey to the final account make the difference between a cost the adjuster can accept and one they cannot.
How we can help
Kildare Cost Management provides independent quantity surveying support to property owners, developers, insurers and loss adjusters. This covers:
damage surveys and reinstatement scope
reinstatement cost value (RCV) assessment and BOQ
buildings values at risk assessment
claims quantification
repair procurement and cost control
We work alongside the loss adjusting team, not in place of it. The aim is simple: an agreed number, reached quickly, that gets the building back into use.
This article is general guidance only and does not constitute insurance or legal advice. Policy terms vary; always refer to your own policy wording and your broker.
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