Commercial property insurance is based on the reinstatement cost of your building following damage and if your property is destroyed, the insured amount should be sufficient to pay for the full cost of rebuilding or repairing the damage. Normally the declared value is based on total loss of the structure. But what happens if the building is under insured?
Fairhurst Estates Limited, Chartered Surveyors & Property Management specialists (FEL) recently undertook a reinstatement valuation exercise for a retained client and found that on average the sum insured was 16% lower than required.
Howard Derbyshire, Building Director at FEL explains:
“Commercial property owners need to be aware that Insurers can apply “average clause” in the event of a loss. This would deem you a “co-insurer” for the percentage amount by which you are under insured. For example, if your property is only insured for 80% of its true reinstatement value, your insurer may only pay out for 80% of the claim, even if the total claim is less than your insurance value.”
Is your reinstatement value out of date?
Relying on an out-of-date reinstatement valuation can be troublesome. If you do not conduct regular valuations, you are at risk of under insuring your property. In the event of a claim, you would have to foot the shortfall in the bill. On the other hand, if your property is over insured you will end up paying higher premiums than necessary.
How can you check the accuracy of your valuation?
It is advisable to instruct a Chartered Surveyor to evaluate your property and to provide a precise and accurate reinstatement valuation, based on construction methods and regional differences. This will ensure your insurance is as accurate as possible to the true value of your property.
Howard added:
“Having an accurate reinstatement value is crucial, so your property is neither under nor over insured. Contact Fairhurst Estates for an informal discussion on how we can undertake reinstatement valuations on your behalf.”
FEL ASK ‘HOW ACCURATE IS YOUR REINSTATEMENT VALUE?’
Commercial property insurance is based on the reinstatement cost of your building following damage and if your property is destroyed, the insured amount should be sufficient to pay for the full cost of rebuilding or repairing the damage. Normally the declared value is based on total loss of the structure. But what happens if the building is under insured?
Fairhurst Estates Limited, Chartered Surveyors & Property Management specialists (FEL) recently undertook a reinstatement valuation exercise for a retained client and found that on average the sum insured was 16% lower than required.
Howard Derbyshire, Building Director at FEL explains:
“Commercial property owners need to be aware that Insurers can apply “average clause” in the event of a loss. This would deem you a “co-insurer” for the percentage amount by which you are under insured. For example, if your property is only insured for 80% of its true reinstatement value, your insurer may only pay out for 80% of the claim, even if the total claim is less than your insurance value.”
Is your reinstatement value out of date?
Relying on an out-of-date reinstatement valuation can be troublesome. If you do not conduct regular valuations, you are at risk of under insuring your property. In the event of a claim, you would have to foot the shortfall in the bill. On the other hand, if your property is over insured you will end up paying higher premiums than necessary.
How can you check the accuracy of your valuation?
It is advisable to instruct a Chartered Surveyor to evaluate your property and to provide a precise and accurate reinstatement valuation, based on construction methods and regional differences. This will ensure your insurance is as accurate as possible to the true value of your property.
Howard added:
“Having an accurate reinstatement value is crucial, so your property is neither under nor over insured. Contact Fairhurst Estates for an informal discussion on how we can undertake reinstatement valuations on your behalf.”
www.fairhurst-estates.co.uk
|
|
|
Having an accurate reinstatement value is crucial, so your property is neither under nor over insured. Contact Fairhurst Estates for an informal discussion on how we can undertake reinstatement valuations on your behalf. |
|
Stockport sets out vision for next phase of regeneration 
54 homes planned for Lakeside Cheadle Royal plot 
Cheadle Royal acquisition for Manchester developer