Insurance companies are starting to review their approach to insuring your home. This is a direct result of the earth quake risks in New Zealand and insurance companies are going to move to a value based insurance approach rather than square meter replacement approach for property.
Why are they doing this? Insurance companies really don’t know what it’s going to cost to rebuild your house on a square meter basis until a claim comes in. What standard of fitting and the quality of the build is a big part of the costs for insurance companies. Often resulting in insurance companies under estimating the replacement value. Because of this, if you have a home or investment property which is a standard build or with a basic fit out of fixtures you could be paying a higher premium than you should if it was based on the value to replace/rebuild.
What does this mean for you. In most cases it will mean you need to get your property accurately valued to ensure your insurance cover is sufficient to meet your needs. It will remain the property owners responsibility to get this right, so engaging a good property insurance adviser is going to be a key part of you managing your risks in this area.
We can help you to coordinate this. For further information check out this article from stuff.