Building insurance and should we increase coverage?

With the cost of building going up are investors relooking at their insurance premiums to reflect the increase in building?
What percentage would you be adding to existing premiums? 20%?

TIA

 

I'm in this predicament as well. I have done depreciation reports for all my properties and I'm wondering if the Division 43 (Capital/Building) cost is a representation or starting point for building replacement value. As an example, depreciation says ~ $250k (not including demolition and debris removal), CoreLogic Cordell calculator estimates around $310k, CBA estimator (using CoreLogic but applying their profile) is also $310k but QBE (using CoreLogic but their profile) has an estimate of $400k. I consider that a fairly big jump.

I don't mind setting it to $350k to cover any discrepancies but I don't want to pay excessive premium if the Quantity Surveyor should technically be more accurate.

 

Very good point. I've adjusted coverage based upon what i've heard in building costs. I'd rather pay a little more in insurance and sleep at night rather than be tight and run the risk.

I also look at the ratio between the increase in cost of insurance against the increase in insurance cover. Sometimes its only a small increase for the increase of coverage, so I dont worry too muches.

 

I can't comment on insurance issues, but the cost of building has gone up by about 30% for a standard residential property compared to two years ago. If your house cost you $220,000 to build before, budget at least $300,000 now.

 

Many insurers index and adjust the policy insured value based on expected cost increases. It can still lead to uninsured issues or some people opt out of index increases. Review of a renewal notice rather than blind acceptance is wise.

This same issue has become evident with car insurance. I found my car value rose 25%. And my premium reflected it. A agreed value policy is more evident to explain the premium rise than a market value policy where the "value" may not be shown.

 

Hey all, is there any build insurance that covers increase in build price after someone signs fixed price contract? Or if builder goes bankrupt which is becoming common these days unfortunately.