Insurance coverage allows you (the insured party) to be returned to the same financial state you were in immediately prior to incurring the loss. Whether this loss be via a fire or some other event which destroys or substantially diminishes the existing condition of your property asset. For insurance coverage to be fully effective the declared insurance value must be adequate to cover the replacement value of the insured asset. This makes having regular property insurance valuations an essential process for residential and commercial property owners.
Being underinsured is a very dangerous position for any property owner. Most if not all property insurance policies contain what is known as “a co-insurance clause” which broadly implies where under insurance occurs, the policy holder effectively bears responsibility for that percentage of the replacement cost for which they are under insured.
As an example if you have your building insured for a replacement value of $400,000 and the cost of replacing the building in the event of a fire is $600,000, the insured party is responsible for contributing the $200,000 shortfall. For most property owners this would mean that they could not replace their building as it was prior to the insurance event.
The above scenario can be avoided by engaging Kelly & Fitzgibbon to complete periodical property insurance valuations of the relevant property assets.
For business owners the above is especially critical as if there under insured property is destroyed they not only lose their business but their livelihood with the potential resultant impacts upon their ability to support their family and other financial commitments.
Obtaining professional advice around property insurance valuations is a cost effective way to insure you are adequately covered in the event of an event which destroys either a residence or business property.
Call us today regarding your property insurance valuations on Tel: 03 9596 0000 – Elsternwick
Tel: 03 5977 1056 – Mornington
