Posted by Robert Cooper on Jan 10 2014
As property owners and their insurers are starting to consider rebuilding, they are faced with increased building standards that have been introduced in the past 4 years. The building standards apply to new buildings (which includes the rebuilding of residences lost in the fires) and major renovations/repairs in areas that may be affected by fire, and operate to increase the cost of rebuilding. This has led to a number of properties being underinsured in the Blue Mountains area.
Other parts of Australia are also faced with building standards that have been changing over time, including areas likely to be affected by major storms and cyclones.
It is critical that when insurance brokers are discussing the sum insured with their clients, and in particular when the cost of replacement is being estimated, brokers take careful account of current building standards that may be applicable to the property. Knowledge of local requirements will be critical in this regard, as the building standards are mostly applied and enforced by local councils.
Care should also be taken with sum insured calculators on insurance web sites, to ensure the calculators also take full account of the cost of rebuilding, taking account of current building standards and codes.
If you have any further queries about this topic, please don’t hesitate to contact me directly.