Commercial Investment properties present unique challenges when it comes to insurance coverage. If something unforeseen occurs and your building is not adequately insured, the replacement cost for repairs can become a significant burden. Many insurance policies contain penalties and reduction of claim payments due to underinsurance

The role of building valuations

Building costs can increase due to additonal building code requirements when repairing or replacing a property following damage. A building valuation on is a formal, assessment of the property’s replacement cost, considering factors such as construction materials, labour costs, removal of building debris, professional fees, and allowance for cost escala on over me.

It provides a professional recommendation of the amount of insurance coverage required to rebuild or repair the property, ensuring your building sum insured is sufficient in the event of loss. We recommend obtaining a building valuation at least every five years. However, given the recent hikes in construction costs, more frequent valuations are strongly advised. Many insurance valuers offer a one‐time fee for a site visit and valuation, followed by two years of included desktop valuations. Prices often start at $600 + GST.

Why accurate building valuations are essential

An accurate building valuation ensures that the insurance coverage matches the actual rebuilding or repair costs. It helps property owners avoid being underinsured, providing peace of mind in knowing that their property is adequately protected. An accurate building valuation will assist owners by:

• Reducing financial risk: Underinsurance can result in significant financial risk. If an insured event occurs and the insurance payout is insufficient due to an inadequate sum insured, owners may be responsible for covering the shortfall. This can lead to financial strain, bankruptcy and mental anguish.
• Avoiding costly insurance disputes: Accurate valuations can help prevent disputes with insurance companies over the adequacy of coverage. By having a professional valuation conducted and providing evidence of the property’s true value, property owners can avoid potential conflicts during the claims process. If you provide us with a copy of the Insurance Valuation before a claim arises and insure the property at the recommended values, we can negotiate the removal of the underinsurance clause from your policy in advance.

How to obtain a building valuation

To obtain an accurate building valua on, property owners should consider the following steps:

• Engage a Qualified/Reputable Valuer experienced in commercial property assessments. They will independently assess your building’s replacement cost, considering various factors such as location, construction type, and building regulations.
• Regularly Review your building sum insured on your policy to ensure they align with the most recent building valuation. Consult with us directly to understand the coverage limits and any additional provisions that may be necessary for comprehensive protection.
• Follow up Desktop reviews if you have recently had an insurance valuation, set a reminder every year to follow up the valuer for an updated desktop review. This is usually included in your service fee.
• Contact Us for Assistance: We can help you obtain quotes from professional valuers. We earn no referral fees from this service, ensuring unbiased recommendations.

As a property owner, proactively addressing underinsurance risks is essential. By conducting regular building valuations and updating your insurance coverage, you can safeguard your investment and protect yourself from financial burdens in the event of damage or loss.