Replacement Insurance

A Registered Valuer can estimate the cost, at the date of valuation, of replacing your asset with a new modern equivalent asset including the use of current equivalent technology, materials and services to the same size and scale of your existing asset. This will allow you to replace your asset in the event of disaster.

 

What is 'Agreed Value' and 'Sum Insured'

New Zealand homes are insured on an ‘Agreed Value’ approach also referred to as ‘Sum Insured’.  This means that homeowners and the insurer will need to agree on what it would reasonably cost to replace the property and insure it for that amount.  If the sum insured is inadequate to rebuild the property, the house owner will have the option of either building a smaller property within the funds available, or to fund the shortfall from their own resources.

 

When homeowners are asked to come up with an agreed amount to replace their house, homeowners think of just the house itself and will use a dollar rate per square metre to approximate the replacement cost. However, there are other important aspects to consider, such as demolition, site works and inflationary provisions as well as the replacement value of your home.  If homeowners have not factored these costs into their ‘Agreed Value’ they could be under insured as these costs get deducted from the sum insured and could mean that homeowners have less to spend on replacing their property to the same size and spec. 

 

Williams’ Harvey have extensive experience in providing Replacement Insurance valuations to ensure you are properly insured and can replace your home with the same size, scale and quality of home you had before the disaster.