Insurance

Property Reinstatement Cost Assessments – Are your property assets correctly insured ?

Construction costs are subject to constant change, so if you are insured are you confident that you are not either under or over insured in a changing cost market?

Quantity Surveyors are the only construction cost trained professionals that can make sure your assets have the appropriate insurance replacement cost cover.

A Quantity Surveyors purpose is to predict and manage construction costs. They are specifically trained to do so and they don’t value, they don’t build, they don’t design, they don’t buy and sell property. They are independent and professional consultants.

So here’s a quick list of Property Reinstatement Cost Assessments do’s and don’ts : Continue reading

If you’re not properly insured … then it will be a real disaster

Damage to property and buildings by fire and other disasters, natural or otherwise, costs Australians hundreds of millions of dollars every year. In the last year this has been even more defined by the recent floods in Queensland and Victoria.

Notwithstanding the substantial number of properties that suffered as a result of the recent floods, the most common building disaster in Australia is fire, so it is important to be prepared. Luckily we have only had one earthquake in recent history and although the chances of these occurrences are low, the devastation they can do has been clearly seen in Christchurch. Continue reading

Property Depreciation and Natural Disasters


Over the last 6 months, with the unfortunate spate of different Natural Disasters occurring Napier & Blakeley have been requested from numerous clients what effect does it have on their existing and future capital allowances for their investment properties.

The question arises where funds from a third party such as an insurer pays for capital works.

No Insurance 
Where there is no insurance claim, then all demolished capital items may be written off from the date of demolition.  All newly installed and refurbished costs may be claimed once works have been completed.
Tip – ensure you keep all records of expenditure including all associated on costs such as skip hire, professional fees and the like. 

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Are your Fire Insurance Assessments up to date?

Damage to property and buildings by fire and other disasters, natural or otherwise, costs Australians hundreds of millions of dollars every year. In Australia, the most common building disaster is fire, so it is important to be prepared.

 

Napier & Blakeley’s fire insurance assessments are called reinstatement cost assessments. The function of these assessments is to determine the amount a property needs to be insured, to cover the possibility of damage from a disaster. This can include the demolition of the remaining component of the property followed by reconstruction.

 

Construction markets nationally have gone through significant upturns in cost in recent years. While the increase in these costs may have slowed, they are still far greater than they were a few years ago.

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Sherwood fire sparks timely warning about Property Insurance

The recent warehouse fire in the Brisbane suburb of Sherwood should send a significant warning to property owners and managers about property replacement cost assessments. The damage to the Sherwood warehouse was massive. From a property owner’s perspective, it was critical that they were not under-insured.

 

Unfortunately, all too often we see companies that lose their assets (due to fire, flooding etc) without first ensuring they are adequately insured. This is an expensive mistake.

 

Everyday, property owners are at risk of under-insurance due to a variety of factors. The case study below demonstrates the difference between an insurance replacement cost assessment prepared by a qualified Quantity Surveyor and a property valuation estimate.

 

The example is based on a 10,000m2 property which has a 4,000m2 industrial building, including a 500m2 office component.

 

Item

Quantity Surveyor

Valuation

Current building replacement cost

$2,480,000

$2,480,000

Additional building cost for office areas

$290,000

$290,000

Cost of external hardstand, landscaping and services

$600,000

Not considered

Demolition cost of existing structure

$240,000

Not considered

Demolition cost of existing hardstand

$120,000

Not considered

Additional cost of asbestos removal

$200,000

Not considered

Additional costs to achieve current building code compliance

$100,000

Not considered

Replacement cost of Landlord owned tenancy fitouts

$250,000

Not considered

Total replacement cost

$4,280,000

$2,770,000

Cost of re-design and professional fees

$270,000

Not considered

Cost of council fees and charges

$80,000

Not considered

Total development costs

$4,630,000

$2,770,000

Cost escalation between disaster date and final completion of new building (18 months)

$463,000

Not considered

Total replacement cost

$5,093,000 (1,273/m2)

$2,770,000 (692/m2)

 

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