Isabelle Y. Carrier | Desjardins Group
The answer depends on the method used, such as market valuation, municipal evaluation or the approximate value per square foot. The method used will weigh heavy in the balance between receiving full compensation and taking a financial hit following a disaster.
Taking a few precautions will get you an accurate evaluation of your property to make sure rebuilding costs are as realistic as possible.
The assessed value of commercial buildings must take into account the nature and type of construction, fluctuating material and labour costs, and indirect costs for demolition and rebuilding.
- Real dimensions (e.g., perimeter, total area, number of floors, wall height)
- Materials used (wood, masonry, steel or concrete); cost varies according to quality, fire-resistance rating, etc.
- The building’s purpose (e.g., a seniors’ residence will have more requirements than an ordinary rental property)
- Year of construction and condition of the building (renovated or not)
- Complexity of the structure (e.g., single architecture)
- Quality of finishing materials (e.g., marble floors, mouldings, soundproof panels)
- Mechanical and electrical systems and permanent equipment (elevators, automatic sprinkler and alarm systems, air conditioners, etc.)
- LEED certification, if applicable
- Landscaping and parking areas
Additional costs to consider
- Indirect costs that can fluctuate with time such as materials and labour costs, fees for cleaning, demolition and removing debris, as well as the costs for preparing the site for rebuilding
- Costs related to any modifications to comply with the most recent Régie du bâtiment du Québec standards such as fire safety for bed and breakfasts with 5 or more rooms, rooming houses, businesses with 3 or more floors, etc.
- Costs to install automatic fire extinguishers
- Use the services of specialized insurance appraisers who will visit the site and take into account the building’s specific features and other factors that could affect the cost of a future rebuild
- Update the evaluation after any changes or every 3 years in order to accurately reflect any cost changes
For more information: Desjardins Business Insurance