Because of recent inflation fluctuations, should committees arrange insurance valuations more regularly instead of waiting the typical five years? How have market fluctuations affected the insured amount? Could we see more than usual cases of over- or underinsurance?
Yes they should be arranging more regularly than the 5 years due to the recent construction market fluctuations.
We're recommending annual updates at the moment due to construction market fluctuations which have been significant since the pandemic. It's really important to have a valuation done more regularly and at the moment, five years is way too long. It's an added expense, but it's better than being underinsured by a significant percentage.
Inflation within the construction market directly affects the building sum insured / insurance valuation for a strata property. Media has drawn attention to 20% annual increases which have been relevant in some areas, this however is not applicable to all areas. On the other side of the coin some properties have been inflating their building sum insured / insurance valuation amount by the 20% per annum seen in the media which may not be relevant to their area, or property, resulting in significant over-insurance as well.
We can bring your sum insured back in line with what's actually happening in the market for your property, not just based on the insurer's automatic indexation. Prior to the pandemic the insurer's automatic indexation was typically too high, but generally since the pandemic it has been too low and it cannot be relied upon. Also, what is the basis of the number that the insurer is automatically indexing? Is it correct, current and relevant to your property?
An independent valuation for your property rather than being based on what has been read or seen in the media is key, especially at the moment in a rapidly moving market.
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Zac is a Certified Quantity Surveyor of the Australian Institute of Quantity Surveyors. He has over 15 years experience consulting to the Strata industry, all over Australia. He founded GQS in 2017 through relying on his expertise and experience across many facets of Quantity Surveying and has since led the team to now have consulted to over 10% of all community title schemes in QLD. He has a reputation for a highly professional results-driven approach and has led project teams on the firm’s largest and most challenging projects. He is committed to helping his clients and ensuring they receive maximum benefit from GQS' experience and data led approach. Zac is very passionate about what he does and how his team can benefit a property with certain and accurate advice.
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