What is an Insurance Valuation / Replacement Cost Estimate?

Insurance premiums are based on an insurable value. An insurance valuation / replacement cost estimate prepared by a suitably qualified Quantity Surveyor provides expert advice on what this value should be.

Insuring a strata titled property, or any property for that matter, is not as simple as using the construction cost. No matter the original construction cost, to be appropriately insured for an insurable event the estimate must include; escalation, demolition / removal of debris, re-design fees and application fees. These are all significant costs over and above the construction cost.

It is important to be appropriately insured, especially in this day and age when the ”averaging clause” is typical in most policies. The averaging clause protects the Insurer by only paying on an insurance claim the percentage of the total replacement if the Insurer can prove that the site was being under insured. It is important to leave this exercise to the experts!