Huge Difference in House Valuations Raises Concerns of Home Owner being Under Insured
Christchurch, Canterbury, New Zealand (PRWEB) August 22, 2014 -- "Up to 90% of home owners are likely to be significantly under insured,” says Victoria Whitta.
My Rebuild Value & Red QS’s Victoria Whitta says the insurance industry, banks and the Government need to be doing more to highlight the importance of having a correct valuation of a property under the new sum insured cover in New Zealand.
“With recent media coverage in the print and electronic media highlighting the huge variations in valuations of the same property, undertaken by different companies or individuals, it is clear that some property owners will be underinsured,” she says.
Over the weekend Consumer magazine published a ‘mystery shop’ of companies offering sum insured valuations for homes.
The results of the ‘mystery shop’ were varied, but the key finding was that all five of the companies who performed sum insured valuations on the same two properties, costed the rebuilds at over $100,000 more than the default figure provided by their insurer.
One News responded to this and showed a news piece on it on Saturday (9 Aug) http://tvnz.co.nz/national-news/huge-differences-in-house-valuations-cause-concern-6050814
Consumer’s Sue Chetwin told ONE News, "We were shocked because what is an ordinary consumer to do? The insurance companies have now said that you have to have sum-insured - that means you have to name the sum yourself."
Whitta says this isn’t about drumming up more work for her company; she says they are running at full capacity but she feels she has a professional duty to reiterate what My Rebuild Value & Red QS has been saying for the last year; that the default sum insured valuation sent out by the insurance company was never supposed to be an accurate reflection of the cost to rebuild your home should the worst happen, and the onus is on the homeowner to get a correct valuation for insurance purposes.
“The default insurance figure is a rough guess, based on the estimated size of the home, and it is designed to ensure that New Zealand homeowners are insured for a value (versus no value) as the move from full replacement cover to sum insured cover has been implemented. Unfortunately it seems that the ‘she’ll be right’ attitude, plus a lack of understanding and perhaps a reflection of how busy our lives are, has resulted in as many as 90% of home owners have not sought to confirm the true replacement value of their homes. More worryingly, this means that up to 90% of home owners are likely to be significantly under insured,” says Victoria Whitta.
Getting professional assistance with a house rebuild valuation does cost, but Whitta says the Christchurch earthquakes have clearly illustrated that not being correctly insured can be far more costly.
“With the accepted understanding that the Alpine Fault could go at any time, together with the significant number of weather events resulting in homes being destroyed or badly damaged, it is not such a case of ‘if’ you will ever need to submit a claim, but ‘when’.”
It is important also to consider the ‘who’ when choosing the expert to help with the rebuild value and Whitta has the following advice:
“Make sure they hold a qualification and have extensive professional indemnity insurance. Ideally, use a fully qualified quantity surveyor because of all the construction professionals out there, the qualified QS has been trained and educated to do exactly this type of valuation. They bring together all of the costs involved in rebuilding a home; from the bricks and sticks, through to the compliance costs, demolition and inflation. The QS does this for a living and therefore holds the most relevant experience as an expert in this field,” she says.
Whitta adds that she hopes that the next news item about sum insured policies in New Zealand is not about a family who has lost their home due to a fire and can only afford to rebuild a garage because they accepted the default sum insured valuation from their bank or insurer.
“New Zealand homeowners need to sit up and takes notice, and those with a financial interest in homes, such as banks and trusts, have an obligation to protect that interest,” she says.
For more information, please contact Victoria Whitta 03 9281107 victoria(at)redgroup(dot)co(dot)nz.
My Rebuild Value http://www.myrebuildvalue.co.nz
Victoria Whitta, Red Quantity Surveying Limited, My Rebuild Value Limited, http://www.myrebuildvalue.co.nz, +64 3 9281107, [email protected]
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