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Not having knowing the latest changes and not having the right insurance valuations can be a costly exercise. An insurance policy is a mechanism to protect the things of great value. They can vary from a unit to a motor vehicle. Determining the replacement value of a building can vary by its type and construction. Below are some of the critical things to know about Insurance Valuations in 2015 to stay safe.
Strata title insurance it is designed to protect the owner and the strata assets. The premium is shared amongst the lot owners as a component of their strata fees.
Peter Greenham from Independent Inspections says “Holding strata insurance is mandatory for strata schemes around Australia. Some strata schemes are under insured and it is best practice to obtain an independent insurance valuation once every five years. “ This will determine if the building is adequately covered to be replaced, in case of an event.
The reinstatement cost is where a property is lost or destroyed in the event of fire or extreme event. Where the property is to be replaced on the condition equal to when originally constructed.
Any improvements to the building should be made known to the strata manager, so that changes can be included in the replacement insurance valuation.
The strata scheme valuation only includes the fixtures and fittings in the building, such as kitchens, walls and appliances. Internal contents of the building are not included in the insurance cover.
There was one particular building used as a case study, where the building experienced a fire, it happened to be two commercial units. The site was fenced off as it sat idle for twelve months. Then the rubble was removed after 14 months and the site was bare for another six months. Then, 18 months after the event, construction of the building finally was started. The building was completed 26 months after the initial event.
“This is where the loss of rent is included in the insurance policy, to cover costs of alternative premises until the building is rebuilt“ says Peter.
There is also an issue with asbestos that can impact the insurance policy. There was an example of a building that has an asbestos roof where the insurance cover would not be reinstated until the roof was replaced with metal sheeting.
The recent bush fires and cyclones highlight the importance of insurance for building, plant and equipment.
Queensland Cost of damage for cyclone in 2014 was $8,400,000 Cyclone Marcia in 2015 cost has reached $50,000,000 New south wales bush fires for 2013 was $183,400,000 Perth bush fires for 2014 was $15,000,000 Northern territory cyclone Tracy, in current costs would be 2 to 3 billion dollars.
There was a report released by the bureau of transport economics, it was titled the economic costs of natural disasters in Australia.
Release ID: 76098