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Insurance Replacement Valuation Report
An Insurance Replacement Valuation is a report that assesses the accurate replacement cost of a building in the event of any loss or damage to the property.
This valuation process estimates the actual cost to rebuild the building at the time of the valuation, ensuring that you are adequately insured should an unfortunate event arise.
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The Role of Quantity Surveyors in Insurance Valuations
Quantity surveyors, experts in construction costs for both commercial and residential properties, are recognised as the most suitably qualified professionals to provide advice on the insurable value of a property. Their expertise extends to the valuation process, ensuring that the sums insured are accurate and fair.
At Duo Tax, this is exactly what we provide, helping you to understand better what costs you may be facing.
Factors Considered in Insurance Valuation
The insurance valuation of a property, whether new, strata-titled, commercial, or residential, is not as simple as using the construction cost. The valuation process for insurance purposes must include:
- An assessment of reconstruction times
- Demolition costs
- The replacement construction cost of the building based on current market rates
- Conformance to statutory changes implemented since the original date of construction
- Due allowance for cost escalation
- Professional fees
Do You Need an Insurance Valuation Report?
An Insurance Replacement Valuation assessment should be done regularly as the cost of the building can change. If you are a property owner, it’s essential to make sure you are adequately insured for the correct amount in case you need to make a claim. This also ensures you are paying the appropriate premium for your property with your insurance company.
The Importance of an Accurate Replacement Cost Estimate Report
Australia is prone to severe and erratic weather conditions, which can cause flooding and damage to numerous homes. In these circumstances, property owners need adequate insurance coverage to mitigate the financial impact of natural disasters.
However, determining the right amount to insure can be a complex process. If the insured value is too high, the owner will be paying an overstated premium. Conversely, if the insured value is too low, the owner will be liable to pay for the remaining replacement costs that aren’t covered by the insurance.
To strike the right balance, property owners should consider obtaining an insurance replacement report from a quantity surveyor like Duo Tax. Our professionals are equipped with the expertise to provide an accurate assessment of the replacement cost, ensuring that the insured value is neither too high or too low.
The Role of a Quantity Surveyor in Calculating Replacement Cost of Home
We, as quantity surveyors, are the most qualified professionals for estimating construction costs that are accepted by insurers or, in legal proceedings, the courts.
There are a lot of costs associated with replacing a home, from the obvious costs of constructing the house itself to the not-so-obvious hidden costs such as professional fees. Usually, an insurance company will estimate these costs via a per-square-metre calculation, which often results in a too-high premium.
On the other hand, we will do a proper assessment of the property, providing a breakdown of the reconstruction costs to give the client a cost-effective insurance premium and claim.
Where We Come In
At Duo Tax Quantity Surveyors, our team can assist you with your Insurance Replacement Valuation, providing you with the required amount to cover the replacement and reinstatement costs adequately.
What Do Insurance Valuation Reports Include?
The report itself entails the cost of replacing the existing property with a structure of a similar size and quality, including the replacement of existing fittings and fixtures.
While a physical inspection is preferred to perform an assessment of the property, the Australian Institute of Quantity Surveyors (AIQS) states that where an inspection is not possible, a desktop assessment should be undertaken, meaning the report can still be prepared for properties in remote areas.
Following the guidelines put out by the AIQS, the assessment observes the following:
- Building construction costs
- Additional or updated statutory requirements
- Professional fees, including (but not limited to) Surveyor, Architect, Structural Engineer, Civil Engineer, Hydraulics Consultant, Quantity Surveyor, and Project Manager
- Development application and other authority costs
- Demolition and removal of debris
- Duration of demolition, design, and construction
- Escalation during the insured period
- Cost escalation during demolition, design and procurement
- Cost escalation during construction
The report will break down the estimated replacement costs as per the assessment of the property. A percentage of these costs is then used to calculate the escalation in prices, which can be used to adjust the insured value over the insured period; however, a reassessment should be done every few years.
Why Choose Us Over Others?
We have a proven track record of representing clients as experts in property damage claims. When insurers underpay, we make sure homeowners receive payouts that fully cover rebuilding costs.
Under instruction from your legal representative, Duo Tax can assist with this professional assessment of the true cost of replacing your building that may no longer be fit for use.
As affiliate members of the AIQS, we can also respond to many of your needs or concerns regarding insurance enquiries.
Give us a call at 1300 347 672, and we can provide you with expert guidance.
Who can provide an Insurance Replacement Valuation?
Quantity surveyors, being experts in construction costs, are the most suitably qualified professionals to provide advice on the insurable value of a property.
What factors are considered in an Insurance Valuation?
The factors considered in an insurance valuation include reconstruction times, demolition costs, the replacement construction cost of the building at current market rates, an allowance for cost escalation, and professional fees.
How often should a Building Replacement Valuation be assessed?
This report should be assessed regularly, as the cost of the building can change over time.
How can Duo Tax Quantity Surveyors assist with Insurance Replacement Valuation?
At Duo Tax Quantity Surveyors, we can provide an Insurance Replacement Cost Assessment report that will give you the required amount to cover the replacement and reinstatement costs adequately.
Our report includes the re-construction time, demolition cost, replacement cost, cost escalation, and any further professional fees.
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