When have you last considered what your building would cost to rebuild?
January 29, 2024
When have you last considered what your building would cost to rebuild? Don’t wait for a weather event to think about it…
With the end of 2023 and the start of 2024 delivering harsh weather events all around QLD, and summer is not over yet…. it is the ideal time to think about underinsurance.
You never know when these types of events or natural disasters will occur, which is why you need to be prepared and ensure you are not one of the many Australian households that are underinsured.
The importance of having an appropriate Insurance Policy, with adequate Limits or sub limits of liability is paramount and should always take into account any possible ‘Underinsurance’ potential impact.
When doing this you need to consider the following:
Replacement Material Costs
Both local and imported building materials have risen in cost due to demand and supply shortages post-COVID, and this was further exacerbated after the various weather events over the last 2 years. This has resulted in some people finding that they were sometimes grossly underinsured, and as such, had claim payments and settlements considerably reduced.
Consideration also needs to be given to both the a) extra time and b) extra costs related to imported materials, due to hold-ups in supply.
To help you determine the correct amount to Insure your house for, do some research, talk to experts, and review your policy to ensure you are able to remove the damaged building and rebuild with the amount on your policy.
Removal of Debris
One thing you have possibly not considered is the additional cost of removing debris from your property. As many buildings still have varying degrees of asbestos sheeting or large amounts of materials as part of their overall construction, there is a large cost associated with both the removal of debris (following a loss) and the replacement of the damaged area. Further, there can be a ‘flow on’ effect where Increased Cost of Working Policy sub-limits may also be required to be utilised following this kind of loss.
Regardless of the damage done, debris will need to be removed and will incur a cost to do so.
Current Relevant Laws
State and Federal Laws can change in regard to minimum standards of particular things in your house. An example could be that there have been changes in the ‘wind rating’ of roller doors used in commercial buildings. Following various cyclones and storms, insured clients have discovered that because they had ‘old’ roller doors that didn’t comply with the new building laws, they didn’t have an adequate sum insured to pay for replacement with new ‘legally compliant’ doors.
Check to see if changes in the law, impact you.
Your Rivers Insurance broker can advise on policy coverage and adequate Limits of Liability required for your circumstances. Following your broker’s advice will result in better outcomes during the claims process.
We’ve prepared this PDF document that explains in more detail the impacts of being Underinsured and what to do to fix the issue. Download here