insurance valuations aren’t just a legislative requirement
Estates Underinsured From Day One, This Estate Was 32% Short
When we were appointed as strata manager for a townhouse estate, our onboarding review identified that the owners corporation did not have a current insurance valuation, with sums insured unchanged since settlement. Given rising construction costs and the time elapsed since the townhouses had settled, we recommended to owners that a specialist independent valuation be undertaken to confirm whether the existing cover remained appropriate.
This is a common occurrence with new developments. The initial sums insureds are set low so the fees are attractive to new purchasers, but by setting low fees the sums insureds don’t accurately reflect the true cost to rebuild (including items like demolition, debris removal, council fees and professional services). Once approved, we arranged for a professional valuation consultant to assess the property, who found that the property was underinsured by over 32%! We passed on the updated valuation to the insurer, and the owners corporation is now adequately covered should the worst occur.
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