Did you know that many bodies corporate lose money on insurance premiums by skimping on the valuation? In some cases, the reason might be that the body corporate has not met its obligation to obtain the mandatory 3-yearly replacement cost valuation – this usually leads to over-escalating the sum insured by applying the same “on-the-safe-side” escalation rate of 10% year after year.
It has become the norm to increase insurance cover for community schemes by 10%, or even 15%, per year. On the other hand, some bodies corporate choose not to increase cover at all. However, how often do bodies corporate consider decreasing cover?
For many bodies corporate, this time of year signals AGM season. As managing agents set up annual general meetings (AGM) with trustees and other body corporate members, it is important that all the required documents and figures are ready for this important gathering.
When determining the insurance value of a building, it is important to consider all the relevant factors. The Africa Property & Construction Cost Guide 2018 – published by AECOM, the globally renowned infrastructure firm – is a very helpful guide when estimating a building’s replacement cost.
Every three years, when the mandatory insurance valuation is due for bodies corporate, trustees and managing agents set out to collect and compare quotations from different service providers. Some trustees seek to make it a painless exercise by appointing the valuer recommended by the managing agent, others appoint the valuer offering the cheapest quote without considering any other factors.