How much should my buildings be insured for?

CC&A Insurance Brokers
Tip of the Month – April
3rd April 2014
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Building Insurance

Not what an estate agent tells you, you can sell it for!

CC&A Insurance Brokers have recently embarked on an exercise in which we studied the increase in building costs in recent years. The results were astounding and we therefore caution all property owners to re-evaluate the sums insured on their buildings.
It is important to remember that you need to insure your buildings at the costs of rebuilding the property and not at its current market value.

For example:
A 300m2 home may be valued at R2,500,000 by an estate agent. This valuation would be realistically based on what similar homes in a similar area may have recently been sold for. However, it has no relation to the cost of rebuilding the home following a serious fire.
Depending on the finishes building costs could exceed R12,000 per m2. Which equates to a correct sum insured of R3,600,000.
Since AVERAGE* is applicable to fire claims, a property owner could find them self not receiving the settlement they were expecting if they do not insure their property at the correct value.

A fire claim is a very traumatic event. Don’t add to the trauma by under insuring your property!

*AVERAGE: Definition by Wikipedia

CC&A Insurance Brokers (Pty) Ltd – In your corner since 1969!