Underinsurance Risk Assessments
Australian Insurance Valuations provides independent underinsurance risk assessments to help property owners, investors, strata managers and commercial asset owners review whether their current building sum insured adequately reflects today’s rebuilding costs.
What is underinsurance?
Underinsurance occurs when the insured value of a property is lower than the amount required to rebuild or replace the insured improvements following significant damage or total loss.
Many properties become underinsured gradually as construction costs increase, buildings are renovated or insurance policies are not reviewed regularly. An independent assessment can assist property owners in understanding whether their current building sum insured remains appropriate.
Common causes of underinsurance
Outdated insurance valuations, rising construction costs, renovations, building extensions, inflation, increased professional fees and changes to building standards.
Why reviewing your insurance cover matters
Regular insurance reviews may help reduce the likelihood of unexpected financial shortfalls after major property damage.
Increasing Construction Costs
Labour, materials and contractor pricing may change significantly over time.
Property Improvements
Renovations, extensions and upgrades can increase rebuilding costs.
Building Code Changes
Current rebuilding requirements may differ from when the property was originally constructed.
Professional Fees
Architects, engineers and consultants may contribute to total reinstatement costs.
Demolition Costs
Demolition, debris removal and site preparation can represent a significant rebuilding expense.
Inflation
Long-term increases in construction costs may affect insurance requirements.
Why obtain an independent risk assessment?
Review current replacement cost considerations using available construction information.
Provide useful information when reviewing building sums insured with insurers or brokers.
Receive an objective assessment prepared specifically for insurance valuation purposes.
How we assess underinsurance risk
Review Existing Cover
Review current insurance information and building details.
Property Assessment
Assess the building, improvements and relevant construction characteristics.
Replacement Cost Analysis
Estimate rebuilding costs using current replacement cost considerations.
Professional Report
Receive an independent report to assist with future insurance decisions.
Underinsurance Risk Assessment FAQs
What causes underinsurance?
Construction cost increases, renovations, inflation, changing building standards and outdated insurance valuations are common causes.
Who should obtain an underinsurance assessment?
Residential owners, commercial property owners, investors, owners corporations, strata managers and asset managers.
Can underinsurance be avoided?
Regular reviews and independent replacement cost assessments can help property owners make informed insurance decisions as circumstances change.
Concerned your property may be underinsured?
Contact Australian Insurance Valuations to arrange an independent underinsurance risk assessment and replacement cost review for your property.
Helping property owners make informed insurance decisions through independent replacement cost assessments.