Insurance Valuation

Is a building insurance policy compulsory?

Depends! All Strata Schemes more than 2 lots are required by legislation to have adequate insurance in case of total destruction. Consequently, a 2 lot scheme, if each lot is freestanding and no part of the lots verge on common property can elect not to take out insurance. Quantum QS recommend that a policy should be taken out on all buildings. The peace of mind for maybe destruction of one of the greatest monetary assets you will own should far outweigh the premiums attached.

Under Section 85 of the Strata Schemes Act, 1996, a valuation of a building that is required to be insured must east once every 5 years. Body Corporate Services recommendation to all Executive Committee’s is to have their re-valued for insurance purposes every 2-3 years.

Why commission a professional to prepare an insurance replacement cost estimate?

You need to be confident and accurate that the cover you take out is correct and sufficient. It is regarded by many as financially suicide to try to save a few hundred dollars on professional fees if in so doing you put at risk hundreds of thousands or possibly millions of dollars’ worth of property.

Is fire the main risk against which you need to insure?

Statistically speaking this would be the correct answer. Although, earthquakes may be somewhat infrequent they can cause widespread destruction, such a terrible demonstrated example would be the Newcastle earthquake.

Who is qualified to complete a building insurance valuation?

The strata schemes management act stipulates that a qualified Quantity Surveyor or Valuer can complete a building insurance valuation.

How frequent is an insurance replacement cost estimate or building insurance valuation required?

Legislation has been implemented in various states across Australia which is mandatory for all Strata Plans to have Insurance Replacement Valuations performed every few (5) years with regular updates. However, once Quantum QS completes the initial report, all subsequent reports will be charged only as a revision fee (desktop update reports) and there will be no need to waste your own time gathering documentation again until the next fifth year cycle!

What other costs should be included in a building replacement valuation other than building?

Obviously the building is the main cost component. However, there are others cost components involved in the estimate. These include the cost of professional fees, inflationary factors, complying with the current building code/regulations, demolition of existing and removal of its debris, and the cost of all external works to the building (these may be, fences, paving, pools and signs and so on).

What does a Quantum QS insurance replacement cost estimate report cover?

A Quantum QS insurance replacement cost estimate report provides you with a written account of the building structure, external works and major equipment at the date of inspection. Moreover, it includes photographs, a measure of the overall building areas, including a breakdown and summary of the associated costs which make up the estimate.

Does Quantum QS prepare insurance replacement cost estimates for loose assets?

We do. Quantum QS can prepare complete contents replacement insurance valuation reports, together with asset register reports, for any type of building.

Can Quantum QS prepare insurance replacement cost estimates for buildings Australia wide?

Quantum QS has alliance and operatives throughout all states Australia wide. Sydney is the headquarters of the company. Our strong Alliance and network associates provide us the competitive edge to provide all types of quantity surveying services across Australia.