With escalating building costs due to COVID and supply chain delays, many residential buildings have been left under insured. Body corporates in Queensland are entrusted with managing shared properties such as residential apartment buildings and townhouses, including ensuring adequate insurances are held. However, the importance of insurance valuations often goes unnoticed, leading to potential risks and liabilities.
In Queensland, body corporates are legally mandated to obtain insurance to cover the common property and any associated liabilities. The Qld government dictates an independent insurance valuation must be done every five years. However, with the escalation of building costs many strata managers are recommending an insurance valuation every three years.
Insurance valuations assess the full replacement value of the improvements of each lot and the common property including construction costs, professional fees, debris removal and other associated expenses required to reconstruct the damaged improvements. By obtaining an accurate insurance valuation, body corporates can ensure they have sufficient insurance coverage to cover potential losses in the event of damage or destruction.
Unfortunately, underinsured properties are far too common. In such cases, body corporates may face financial strain and legal complexities when attempting to repair or rebuild damaged property. Moreover, individual lot owners within the complex may also suffer financial losses if common property is underinsured.
To mitigate the risks associated with underinsurance, it is imperative for body corporates to prioritise regular insurance valuations conducted by qualified professionals. By obtaining accurate valuations, body corporates can ensure they have adequate insurance coverage to protect the interests of all stakeholders. An accurate valuation also ensures the property is not over insured leading to inflated premiums.
At WBP Group, our qualified Certified Practising Valuers can assist with an accurate assessment of your building’s replacement cost to ensure adequate insurance coverage, therefore reducing the risk of being under or over insured. For properties in Southeast Qld and northern NSW, please call Sacha Millar on 0418761661 or email [email protected]. For all other states please email [email protected].
