Property Reconstruction Cost Simulator (SCRIM)

The Property Reconstruction Cost Simulator (SCRIM) is intended to serve as an indicative reference for reconstruction costs of residential buildings in Portugal, with the aim of helping calculate the insured capital for Fire and Natural Elements insurance policies and Home Multi-risk insurance.

In Fire and Natural Elements and Multi-risk insurance, determining the insured capital is the responsibility of the policyholder. In the case of buildings, it should correspond to the market cost of reconstruction, taking into account the type of construction and other factors that may influence this cost.

Although not binding, for many years the construction cost per square meter under regulated rental housing contracts served as a reference for determining the reconstruction cost associated with insured capital for residential buildings. Applying these values to the property area allowed policyholders to easily estimate a base capital value, subject to increases or decreases depending on specific construction characteristics and/or the property’s condition. These prices varied by region and were updated annually by official decree.

With changes to this regime in December 2014, this calculation aid was no longer available. As a result, the Portuguese Insurers Association sought an alternative solution with the following characteristics:

• Credibility, based on solid technical and scientific foundations;
• Independence, free from political or corporate influence;
• Transparency, based on objective and accessible parameters;
• Simplicity, easy for the general public to understand;
• Dynamism, allowing for simple and objective updates.

To this end, APS commissioned FUNDEC – Association for Training and Development in Civil Engineering and Architecture, linked to Instituto Superior Técnico, to develop a model for determining reconstruction costs for residential properties. This model met the above criteria and led to the creation of this simulator.

SCRIM calculates the indicative reconstruction cost of a property based on the gross area entered by the user and the current standard cost per square meter for an average-quality apartment or house (*). It then applies a set of adjustment coefficients (increases or decreases) reflecting factors such as quality, location, and architectural characteristics, as provided by the user.

Additionally, it allows the inclusion of extra values for other housing elements that the user may wish to add.

Please note that the simulator does not apply to all types of construction, as described in its Terms and Conditions, available via the link on the tool’s webpage. Reading them is recommended.

The simulation result is based on the information entered by the user. The accuracy of the data provided is the sole responsibility of the user.

The public availability of this simulator does not affect applicable legal provisions, does not replace consultation of officially published legislation in the Portuguese Official Gazette, nor does it affect contractual freedom between policyholders and insurers or free market competition. It is purely an auxiliary and non-binding tool.

The simulation result does not constitute a recommendation nor any form of mediation between the user and any insurance company.

Recognition of the reconstruction cost resulting from SCRIM does not affect:
(i) the need for adjustments if the property characteristics differ from the model’s standard assumptions;
(ii) the policyholder’s responsibility for determining and maintaining the insured capital;
(iii) the underwriting policies and rules of each insurer.

If in doubt, and for personalized advice, speak with us!

SECURUS recommends carefully reading the SCRIM Terms and Conditions provided by APS, available at the beginning of the simulator.

(*) Values updated for 2023 (based on reference indices from December 2022).
Source: APS – Portuguese Insurers Association