Cost conscious Committees may sometimes believe an insurance valuation is unnecessary or they believe their insurer is providing this valuation.
The requirement under the Act states an independent insurance valuation must be undertaken once every five years. Insurance companies and insurance brokers could be considered independent, but these organisations do not furnish a Body Corporate with an independent written valuation. They are not skilled in the art of valuation.
There can be confusion for Committees because insurers usually automatically increase the ‘building sum insured’ year on year. They do this in line with one of the CPI indicators (eg. Queensland construction index). However, this should not be construed as providing a valuation. Insurance valuation is important because if a disaster does occur an accurate valuation that includes demolition and current rebuilding costs is essential.
Written by Ross Utting of Tracsafe www.tracsafe.com.au