Research has shown that a significant number of residential property owners –estimated to be as high as 80 per cent – have insufficient insurance cover, probably because they simply pay the renewal premium each time without giving any thought to the adequacy of the insured amount.
Unfortunately many people found themselves in a predicament with the level of their insurance cover following the devastating bushfires that swept Victoria in February 2009 and the Queensland floods in 2010.
When calculating the amount of cover required, it is important that increases in property values over the previous 12 months, alterations or additions made to a property and the cost of replacing outbuildings, fences and gates be taken into consideration.
The purpose of a reinstatement cost assessment or insurance valuation is to assist the owner of the property to obtain quotations for insurance on their property.
As Australia’s largest independent property services firm, Opteon has trained and experienced Valuers and Quantity Surveyors operating throughout Australia and are able to undertake valuations and cost replacement assessments nationally.
Understandably, many home owners do not have the required knowledge of building costs to enable them to calculate how much it would cost to rebuild their home if it were to be destroyed.
Although some companies offer policies that provide new for old – instead of working on a nominated amount of cover – if a certain percentage of the house is destroyed by fire or impact, it is advisable for the insured to determine exactly what the cover includes.
Contingencies such as the maximum sum allowable to meet the cost of temporary accommodation should the house become uninhabitable, the extent of the cover for demolition and removal of debris following a fire and the range of events provided for by the policy are all critical factors.
Under insurance can cause major disruptions to your business or to the value of your property assets in the unfortunate instance of a disaster. For most property owner and investors the decision on the amount of insurance cover is solely up to them.
In respect of strata developments, Body Corporate or Strata Corporations are responsible for obtaining insurance cover. A principle obligation of these managers is to ensure that appropriate building replacement insurance is current and adequate to cover the costs of repair or replacement in order to protect the interests of all property owners.
Failing to adequately insure may lead to the Body Corporate or Strata Corporation becoming liable for the shortfall in proceeds that may be required to reinstate the buildings in the event of damage or destruction of the property.
To ascertain appropriate insurance levels, a Valuer or Quantity Surveyor can provide a professional report upon which you can rely when purchasing insurance.