Getting the initial insurance replacement value for a property right is more important than you may realise.
It ensures insurance cover for that policy period is adequate in the event of a claim.
By establishing an accurate starting point, it significantly increases the odds of future insured amounts also being appropriate.
Although always a valuable starting point, the original construction cost may not accurately reflect the cost to reconstruct your development during the insured period.
It seems logical that the person who built the development and knows its original construction cost will be best placed to set its initial insured value. Surprisingly, this may not be the case.
Original construction costs obtained by word of-mouth are particularly unreliable as you don.t know which of these cost components, or other development costs such as finance and marketing fees, may have been included. In some cases the cost provided may even be intentionally misleading.*
The original construction cost is useful and should be provided to the person preparing your replacement building insurance valuation . but it should not replace an independent valuation, professionally prepared specifically for insurance purposes.
QUANTITY SURVEYOR & SPECIALIST TAX AGENT