Why You Need An Insurance ValuationNovember 17, 2020
Written by Zac Gleeson, Director
A high end complex of 50 apartments were subject to significant damage due to a tropical cyclone. The damage was so significant a lot of the apartments were reduced to a shell.
The property was, at the time, insured for $48.7M. This was the original price of construction when it was built. This amount was put forward by the Developer and accepted by the Body Corporate Committee and Insurance Broker.
As a matter of fact, the building should have been insured for $59.2M which included; construction, escalation, demolition, removal of debris, re-design and documentation. Essentially only 82.2% of the property was insured.
The bill to re-construct the property came in around $22.5M. As the insurance policy included the standard ‘averaging clause’ the Insurer was only subject to cover 82.2% or $18.5M of the $22.5M construction bill. The Owners of the apartments then had to raise $4M to be able to re-construct the property back to its former glory.
It is important to leave the value in which your property is insured, to the experts. GQS can confidently estimate the cost to rebuild your property inclusive of all appropriate allowances. You may also feel you are over-insured and paying unnecessary premiums. By taking a report prepared by a Quantity Surveyor to your Broker you can decrease the value you are insured for and therefore decrease premiums. Call 1300 290 235 to arrange an insurance valuation of your building.