Skill Jobs Forum

Estimating an adequate sum insured for a property calls for a replacement cost valuation, i.e. for replacing like with like in the event of loss or damage. Unfortunately, most properties are found to be incorrectly insured, the reasons for this being multiple:

·         confusing insurance value for market price

·         relying on unqualified advice

·         applying the same incorrect escalation rate year after year

·         being too thrifty to obtain a property insurance valuation

In fact, most properties in South Africa are underinsured and the owners seldom realise the implications thereof. They usually only come to appreciate the value of a professional valuation once it is too late.
Many homeowners believe that insuring their property for its purchase price or market value will have them covered, however, in the event of total loss or partial damage to their property this may not suffice to replace their lost property like with like at today's building rates.

A popular (and cheap) way of determining the sum insured is to commit the estate agent, managing agent or insurance broker to their opinion. But do they always know to take into account the current rates for a property's specific geographic or topographic location, or its static considerations? How about additional building services such as electrical installations, access control, intercoms, air-conditioning etc.

Cost & Benefits

A professional valuation is more affordable than most people would assume, especially when the cost is shared between multiple owners, such as in a Body Corporate or Homeowners Association.

Please enquire about our discounts on valuation updates.

It certainly is money well spent when considering the many benefits:

•   correct insurance cover - pay the right insurance premium
•   full claim recovery - no averaging necessary by the insurer
•   less hassle - no disputes with a professional valuation in hand
•   no 'average' clause  - negotiate with the insurer to delete the 'average' clause from the policy
•   pass on the responsibility - let the valuer determine the sum insured
•   long term affordability - periodical valuation updates cost only a fraction of the initial fee .

Body Corporate Valuations

As stipulated in the Sectional Title Act, it is the fiduciary duty of the trustees to manage the insurance of their body corporate and ensure that it is sufficiently covered, bearing in mind that claims - even if only for partial loss or damage - are subject to averaging by the insurer if a body corporate is found to be underinsured. Therefore, the sum insured must make provision for all costs associated with reconstruction, including demolition, rubble removal, professional services, building rates and additional building services, as well as inflation of costs since policy inception, all of which can only be accurately determined by means of a professional Replacement Cost Valuation.

http://www.mirfin.co.za/Valuations-for-Insurance.aspx