Are you sure your property is insured for what it would actually cost to rebuild or repair?
In the last few years, the cost of building work has hit record highs. At the beginning of 2023, CoreLogic NZ reported the annual rate of residential building cost inflation had accelerated to 10.4%, the first double digit annual figure in a decade of price-tracking. A surge in new builds, materials supply issues, labour shortages and completion delays have all contributed to the unprecedented increase in the cost of construction.
Meanwhile scientists globally agree that the frequency and intensity of extreme weather events is increasing, and the impacts will continue to worsen in the future. Many people suffered major losses from weather events like the Auckland Anniversary weekend floods and Cyclone Gabrielle. With events like these happening more often, it’s imperative that your insured sum is based on an accurate and up-to-date valuation. We recommend a reinstatement cost assessment is carried out at least every two years by a qualified and experienced professional – or sooner if your property has been extended or altered.
Many insurance companies offer online calculators to help you calculate a rebuild cost for your home in the event of a total loss. But these rebuild calculators often don’t consider the many and varied costs that can be associated with reinstating your home – especially if your home is in any way non-standard. If you own an architecturally designed or highly specified home, or your home has additional features such as retaining walls, driveways, pools and ancillary buildings, relying on an online calculator could leave you substantially underinsured.
What’s more, sum insured calculators almost certainly won’t take into account the rapidly changing costs of construction – not to mention the costs of demolition, removal and disposal. Nor can they accurately estimate the likely costs of compliance and professional fees, which can vary widely depending on the location, design and construction of your home.
On the other hand, a specialist insurance rebuild valuation will give you a realistic estimate of the total reinstatement costs, including demolition, site clearance, rebuilding, replacement of driveways, retaining walls, fencing, decking, garages and pools, plus professional and compliance fees, as well as an estimate of inflation costs throughout the insurance period.
At Prendos, we’ve been providing our clients with accurate reinstatement valuations for over 30 years. The valuers undertaking these assignments are qualified, registered and belong to the Property Institute of New Zealand. For complex and high value properties, our quantity surveyors carry out more detailed investigations and provide a Reinstatement Estimate for Insurance Purposes in line with New Zealand Institute of Quantity Surveyors (NZIQS) guidelines.
While a professional insurance rebuild valuation will cost more than using an online calculator, when you think about the potential shortfall between your current sum insured and the true cost of reinstatement, it’s a small price to pay for your peace of mind.
Make sure you’re fully covered for any future loss or damage to your property. To request a quote for a professional reinstatement valuation of your home, simply fill in the form below or call us on 0800 773 636 now.