Insurance cover needs to be regularly updated to make sure your insurance works as it
should.
We've got you covered
Insurance is used to protect you in case of disaster. Having adequate cover ensures that you can get back to the same position you were in prior to the event, but it is important that the cover is kept up to date and is sufficient.
Building costs have changed quickly over the past three years and this has affected the cover you need to have and the premium paid.
Why Use a Registered Valuer?
A Registered Valuer can identify the construction costs for your building and site development, as well as likely cost increases and the cost to clear the site. We provide a professional, independent, timely, and reliable assessment that includes all aspects required for the cover you need, and our reports are accepted by the insurance companies.
Several occupations can estimate building costs. Each has their advantages depending on the purpose of the estimate. Because of the reliability and cost effectiveness in assessing property related costs, replacement values for insurance are a significant part of a Registered Valuer’s core business.
Changing Building Costs
The cost of construction escalated very quicky during 2021 to 2023. This has affected the cover needed not only for what we know about but also for the time it takes to reinstate the building. The graph below shows the extent of the changes and how quickly they occurred.
Source: Statistics NZ - Capital Goods Price Index
Allowing for inflation
Our assessments are at the start of the insurance period, and allowance needs to be made for the increase in costs for;
· The period of insurance
· The time taken to assess and approve the claim
· The time required to clear the site, prepare and obtain approval to plans to replace the building and
· The time required to complete construction.
Future inflation can be a significant part of the cover. This is illustrated in the graph below that shows the percentage of inflation on the replacement cost. Because of the factors above, this increases and decreases more than past cost increases recorded at the time of the assessment.
Source: Statistics New Zealand Capital Good Price Index. Inflation for the cover period and a 16 month rebuild period.
This emphasises the need for regularly updating the assessment. Assessments in June 2024 updating 2022 assessments are seeing very small increases in overall cover for this reason.
Not included
Items not included in our assessments include vegetation such as trees, shrubs and lawns, furniture and chattels, and specialised equipment. Fitted equipment such as ovens, heating and hot water systems are included.
We include retaining walls up to 1.5metres. Over this height it is industry best practice to obtain a specialist who can assess the more complex engineering involved.
Land is not included in insurance assessments. Site development such as drives, fencing and decks are included.
Any land damage from natural hazards such as earthquakes and flooding are covered by the Natural Hazards Commission.
Using Valuations for Insurance
Our insurance valuation report sets out the basis of the assessment and a brief description of the building. It is intended for insurance companies and contains information that sets out the basis of the assessment and data that insurers usually require.
Insurance assessments should not be used for other purposes, for the same reason that market, mortgage or rateable values should not be used for insurance as they are on a different basis and can be very different.
The Work We Do
Registered Valuers offer valuable insights on how to protect your property effectively. Working with a Registered Valuer, you will have peace of mind knowing that your insurance cover will adequately protect you from disaster.
Our company provides insurance assessments for single family homes, multiple flat buildings, low- and high-rise apartments, offices, Industrial buildings, commercial and industrial portfolios.
Max Meyers & Co. are experts in providing property owners with insurance valuation services.
Contact Max Meyers on max@mmco.nz or call on 0279 482 315 if you would like to know more or for a quote.
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