Therefore, while the view and location increased the market value – the value the home will sell for on the open market – the insured value only needs to reflect the cost to rebuild the house as it stands currently.
Many sectional title owners renovate and upgrade their units over the years with the aim of adding to their living comfort and market value. These owner-installed upgrades often pose a challenge when determining the replacement cost to insure a sectional title scheme.
This blog comprises a number of typical customer complaints that we deal with on a regular basis. Along with these complaints, we include our responses for easy reference and insight into common insurance valuation matters.
Insurance is often considered a grudge purchase. That is, until it is time to lodge a claim. The same can be said of a legally prescribed valuation for sectional title schemes. Bodies corporate only appreciate its value when their claim is paid out in full without any insurer dispute. In addition, a building valuation is expected to be prudently done but low-priced.
When an insurance policy is due for renewal, many financial advisors will recommend a fixed annual escalation rate of 10%, sometimes even 15%. Does this reflect reality? What if the original sum insured was incorrect to begin with?