House insurance policies are going through a period of change at the moment. This has been getting a lot of exposure in the media and caused a fair amount of concern from home owners.
Where property owners previously had insurance on full replacement/reinstatement, policies will now largely be based on a ‘Sum Insured’ amount. Whatever amount your policy states will be the maximum you’re paid out if your house is damaged. If the rebuild cost is greater, you may have to front up with some of the cost yourself.
It’s believed that this change across most main insurance companies in New Zealand is due the new requirements of to offshore re-insurers who support NZ providers in the event of major disasters like the Christchurch Earthquakes.
Make sure your property is sufficiently insured
It’s now vital that the details of your policy are as accurate as possible.
If you’re under-covered, fully replacing/repairing your Christchurch property may become a big problem. Without the ability to cover some of the cost of rebuild, you could end up having to settle for a house of lesser size or quality.
Regardless of your provider, we’re urging all rental property owners to review their policy. You’ll need to make sure that you’re covered in the event of house damage.
Accurately estimating your level of property insurance
Cowdy strongly recommends using a good property valuer in the Christchurch area. Get in contact with us if you need some help finding someone. This valuer can pick up on certain aspects of your house structure, layout and section that may affect the cost estimate for rebuild.
It may also be a good idea to get more than one valuation on your property to better establish the appropriate sum to be insured for.
A builder who regularly conducts building inspections for Christchurch real estate is also useful. They can assess parts of your home that may require special attention in the event of rebuild.
There are many online calculators that can help but we don’t believe these replace a formal house valuation.
Your insurance broker is there to help!
At the end of the day, your insurance company is who you have to deal with in the event of a claim to rebuild your Christchurch home. If you’re not sure about your policy, call them for advice.
As your policy is renewed, we don’t expect you’d need to go through a whole new valuation. You can use the valuation information previously gathered and work with your provider to accurately estimate the adjustment required on your current ‘sum insured’ amount.
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