Insurance Valuations (Sum Insured Replacement Cost)
Our insurance valuations provide an amount for replacing the building and all the ancillary improvements erected on and under the land. Additionally we note those improvements that might be on Road Reserve or other parties land. The calculations provide for inflation over the period of the insurance cover and over the time it takes to reconstruct the building. This is to allow for the sods law occurrence of you suffering a total loss on the last day of your policy. On top of this an allowance is made for demolition giving a sum of those elements as the amount to be covered by your policy.
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House insurance changes.
Since the events in Christchurch the insurance companies have decided that they need to know the limit of their exposure to the market and now require property owners to provide them with a Sum Insured figure for replacement insurance. This figure sets a cap on what the insurance companies will pay out in the event of a total loss. Instead of the insurance companies applying a rate per square metre for replacement cost they now require the property owner to supply a figure that covers the main dwelling, any other improvements like garden sheds, swimming pools, fences, paths, anything that has been done to the land to improve its value. So supply of services falls withing this category.
As part of our services we undertake on a regular basis insurance valuations for residential dwellings. Our twenty plus years of experience in the field of building costs and construction give you confidence in the figures we supply for insuring your property.
Just to be clear it is only the improvements that are covered any loses suffered by the land are covered by EQC (Earth Quake Commission). The other issue we often have to spell out to clients is that the insurance valuation in most cases does not correlate with the market value, as what people pay to buy real estate does not necessarily reflect what it costs to build in an area, and of course the market value takes account of the land value which the sum insured replacement cost does not.
The above picture looks like a disastar waiting to happen.....but it does n't. Project was mid process at the time of the picture and has since been sucessfully completed. We undertook a valuation for finance purposes which involved complex issues for the bank which had loaned on the 'floating house'.
What do we consider?
Firstly the contour of the land, as it is obviously easier and cheaper to build on a level site than a steeply contoured site with only walk on access. The access in Wellington can have a marked affect on the cost of rebuilding, consider the difference to a builder of being able to unload from their truckdirectly onto the site compared to unloading onto the roadside and then barrowing or winching up to a site 100 metres up or down a hill
As part of our services we undertake on a regular basis insurance valuations for residential dwellings. Our twenty plus years of experience in the field of building costs and construction give you confidence in the figures we supply for insuring your property.
Just to be clear it is only the improvements that are covered any loses suffered by the land are covered by EQC (Earth Quake Commission). The other issue we often have to spell out to clients is that the insurance valuation in most cases does not correlate with the market value, as what people pay to buy real estate does not necessarily reflect what it costs to build in an area, and of course the market value takes account of the land value which the sum insured replacement cost does not.
The above picture looks like a disastar waiting to happen.....but it does n't. Project was mid process at the time of the picture and has since been sucessfully completed. We undertook a valuation for finance purposes which involved complex issues for the bank which had loaned on the 'floating house'.
What do we consider?
Firstly the contour of the land, as it is obviously easier and cheaper to build on a level site than a steeply contoured site with only walk on access. The access in Wellington can have a marked affect on the cost of rebuilding, consider the difference to a builder of being able to unload from their truckdirectly onto the site compared to unloading onto the roadside and then barrowing or winching up to a site 100 metres up or down a hill
Insurance Definitions
Reinstatement Estimate.The estimated cost of reinstating the property to„ as new condition‟ at the level of costs applying at the date of the estimate, ignoring inflationary factors which may operate subsequently unless otherwise stated in the report. It will include the use of available equivalent building materials and techniques and an orderly design construction process. It will include an estimate of the additional costs necessary to comply with existing Acts of Parliament or Regulations under the Act or any By-Laws of the relevant Territorial or Local Authority. This includes compliance with the Building Act and Resource Management Act but specifically excludes any time delays due to the impact of the Resource Management Act. The Reinstatement Estimate assumes a total loss on the last day of the current insurance period. A recent change to standardise all insurance certificates they now include fixed floor coverings, covering carpets and vinyls.
Inflationary Provision. An additional amount to take account of the effects of inflation over the insurance period and the time taken to reinstate the property. Allowances made for the drawing up of plans going through the Consent process and construction.
Functional Replacement. This is the cost for a building to be replaced with a similar function but not necessarily the same design and materials. For example an older couple who no longer need five bedrooms and in the evant of destruction would only require a three bedroom replacement. The valuation certificate should describe the proposed functional replacement and demonstrate the difference between the replacement and the functional replacement costs.
Demolition Estimate. This is the cost that assumes that the assets have been destroyed beyond repair and require to be removed form the site. If there are any noxious materials or thought to be then these should be identified. This is mostly commonly asbestos in its many and varied forms.
Gross Floor Area. The calculations are based on the gross loor area of the dwelling taken around all areas that are enclosed. Any mezzanine floor area is included in the overall floor area.
Site Other Improvements. This includes any items not attached to the main dwelling, such as decks, garages, garden sheds (assuming they are not portable), fences, tennis courts, swimming pools, driveways, paved areas, anything that has been done to improve the land.
Asset Description: This should describe what is being insured i.e.whether it is single or two/three/four storey dwelling what its constructed of and when it, or its additions were erected. Most importantly if some improvements such as a garage are not on the subject property but on say road reserve, then this is identified and spelt out to owner and insurer
Age We estimate the year of construction unless actually known, and of any additions or upgrades.
Condition: Normallly we do not comment on the condition of the poprerty in that it is assumed no matter what stage the maintence is at, with replacement you are getting everything new. However if there were some elements that were of particular risk ie moving retaining wall or piles sinking then we would make a comment. Far better for the insurance company to know about a problem in advance of them issuing a policy as they cannot use it as an excuse for not paying out in the future.
Hazadourous Materials. The main issue we are looking for here is asbestos in its many forms as it can raise quite considerably the costs of demoltion and repairs. In dwellings it is often present in hte claddings without the householder knowing. Duroc tiles are the obvious case, but profile cent sheeting and plain sheeting is less obvious with the age of the dwelling being the main inidcatorof the likely hood of the product being present.
Our certificates itemise
The Replacement cost $0000
Inflation Provision $0000
Demoltion Cost $0000
Total $0000
Reinstatement Estimate.The estimated cost of reinstating the property to„ as new condition‟ at the level of costs applying at the date of the estimate, ignoring inflationary factors which may operate subsequently unless otherwise stated in the report. It will include the use of available equivalent building materials and techniques and an orderly design construction process. It will include an estimate of the additional costs necessary to comply with existing Acts of Parliament or Regulations under the Act or any By-Laws of the relevant Territorial or Local Authority. This includes compliance with the Building Act and Resource Management Act but specifically excludes any time delays due to the impact of the Resource Management Act. The Reinstatement Estimate assumes a total loss on the last day of the current insurance period. A recent change to standardise all insurance certificates they now include fixed floor coverings, covering carpets and vinyls.
Inflationary Provision. An additional amount to take account of the effects of inflation over the insurance period and the time taken to reinstate the property. Allowances made for the drawing up of plans going through the Consent process and construction.
Functional Replacement. This is the cost for a building to be replaced with a similar function but not necessarily the same design and materials. For example an older couple who no longer need five bedrooms and in the evant of destruction would only require a three bedroom replacement. The valuation certificate should describe the proposed functional replacement and demonstrate the difference between the replacement and the functional replacement costs.
Demolition Estimate. This is the cost that assumes that the assets have been destroyed beyond repair and require to be removed form the site. If there are any noxious materials or thought to be then these should be identified. This is mostly commonly asbestos in its many and varied forms.
Gross Floor Area. The calculations are based on the gross loor area of the dwelling taken around all areas that are enclosed. Any mezzanine floor area is included in the overall floor area.
Site Other Improvements. This includes any items not attached to the main dwelling, such as decks, garages, garden sheds (assuming they are not portable), fences, tennis courts, swimming pools, driveways, paved areas, anything that has been done to improve the land.
Asset Description: This should describe what is being insured i.e.whether it is single or two/three/four storey dwelling what its constructed of and when it, or its additions were erected. Most importantly if some improvements such as a garage are not on the subject property but on say road reserve, then this is identified and spelt out to owner and insurer
Age We estimate the year of construction unless actually known, and of any additions or upgrades.
Condition: Normallly we do not comment on the condition of the poprerty in that it is assumed no matter what stage the maintence is at, with replacement you are getting everything new. However if there were some elements that were of particular risk ie moving retaining wall or piles sinking then we would make a comment. Far better for the insurance company to know about a problem in advance of them issuing a policy as they cannot use it as an excuse for not paying out in the future.
Hazadourous Materials. The main issue we are looking for here is asbestos in its many forms as it can raise quite considerably the costs of demoltion and repairs. In dwellings it is often present in hte claddings without the householder knowing. Duroc tiles are the obvious case, but profile cent sheeting and plain sheeting is less obvious with the age of the dwelling being the main inidcatorof the likely hood of the product being present.
Our certificates itemise
The Replacement cost $0000
Inflation Provision $0000
Demoltion Cost $0000
Total $0000