Insurance Valuations
"The bad news is The Big Bad Wolf is coming. The good news is I've got some great rates on house insurance!”
Didn't someone say "The only two certainties in life are death and taxes?" We should probably add another to that list - insurance!
You've probably got some insurance already; certainly on your car, hopefully on your health, maybe on your income, possibly even on your pet! But your biggest asset other than your health is likely to be your property. It's therefore vital that you have it insured for the full replacement value.
After the Christchurch earthquakes of 2011 the insurance industry made significant changes to how they operate. These changes relate to the way they assess the value of your home after a fire, earthquake, flood or similar catastrophic event. Previously they provided full replacement cover - meaning that the buildings and improvements would be replaced, no matter what the cost.
No one predicted the massive rebuild costs associated with the Christchurch event, so circa 2013 the insurance industry decided to change to a sum insured method of value assessment.
This means that you, the home owner, now have to provide a replacement cost valuation of the house and other improvements to the insurance company. They will only cover you for up to that amount. Your insurance premiums will be based on that amount and the perceived risk your property poses - taking into account land stability, earthquake-risk location, etc.
Every property is different and therefore the replacement cost valuation requires careful and considered thought. You must ensure that your valuation includes the replacement of important site development items such as retaining walls, driveways, areas of paving, fencing, decking, and any other buildings on the site. The replacement insurance valuation should also carefully consider the cost of demolition and clearance, so rebuilding of your home can commence on a properly cleared and prepared site.
At Valuewise, Wellington Registered Valuers, we complete detailed replacement insurance valuations that consider all the above issues. We also account for the effects of inflation on the cost of building products and labour, during the period of your rebuild.
If you like to talk or require advice around these issues, or would like a quote for a property valuation relating to replacement insurance cover, please contact us to discuss how we can assist.
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