WA Insurance Value

Discussion in 'Property Management' started by Shogun, 2nd Jan, 2020.

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  1. Shogun

    Shogun Well-Known Member

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    Typical 4 unit development on 800m2.

    Assuming initial build was $200k per unit. What should the value be for combined building insurance?
     
  2. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    You'd need to factor in total loss + demolition/clearing. If you built it recently and are confident with the costs then I'd go $850k. If the build was a long time ago then you'd need to increase it.
     
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  3. Shogun

    Shogun Well-Known Member

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    What happens if only one needs replacing. Does insurance only pay out 1/4 of total insured?

    "Property Investors" trying to save $150 a year. Drive you nuts
     
  4. Beano

    Beano Well-Known Member

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    Plus factor in cost increase during the year
    Valuers do these reports
     
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  5. Beano

    Beano Well-Known Member

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    Insurance is indemnity so they cover your loss .
    If you under insure by 75% yes you pay 75% they pay 25%
    So there is no saving ...you just share the loss
     
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  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    You would need to talk to insurance company. if it's a single policy for 4 dwellings but just one total value amount and there is $300k damage to one unit and you're insured for $800k then they MIGHT pay out the $300k but its not in their best interest to let people ride that risk train.
     
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  7. Beano

    Beano Well-Known Member

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    I see what you mean now
    Build 4 insure 1
    If one burns down then it is the insured one .
     
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  8. Shogun

    Shogun Well-Known Member

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    Using my favorite example of how not to develop

    6 unit site
    Building Permit Certified - 6 x Residential Dwellings, Garage, Fencing and Retaining walls(To be known as Units 1-6 / 6Canterbury Court NOLLAMARA WA 6061)$1,200,000
    https://www.stirling.wa.gov.au/your...017/building/building-statistics-october-2017

    just to give you an idea of quality
    6/6 Canterbury Court, Nollamara WA 6061
    REALas: Property Price Predictions, Real Estate for Sale & Sold Prices

    If you lived in this complex how much should it be insured for?
     
  9. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I would say $1.3m. Money to rebuild + demolition
     
  10. Shogun

    Shogun Well-Known Member

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    You have written elsewhere that the value on building permits is often the lowest figure you can write down.
    The example included fences and retaining walls.

    I am guessing 200m2 of Brick paving is not included or gardens or dishwashers etc.

    If that figure of 200k per unit I would think maybe $250 to 300k plus demo allowance. Last year was insured for $440k.

    Another lesson learnt. Avoid units even if only strata bit is insurance.
    I mentioned $80 each for valuation all no.

    All to save $150. Meanwhile they spend car $700 contents $700 health insurance $2000 and pet $500.

    If I refuse to accept a group decision what happens? Mediation somewhere
     
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  11. Marg4000

    Marg4000 Well-Known Member

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    Doesn’t work like that!

    Like if you insure your house for half it’s value, you won’t get a full payout if half the house burns down.
     
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  12. Shogun

    Shogun Well-Known Member

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    Isn't this a struggle.

    Talked with insurance company.
    4 units with combined cover for $1 million.
    They will only pay $250k max for repairs to each unit
     
  13. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    This is true but these aren't massive units and I feel that the building permit price might be about right. I don't think they are $300k units to replace. You need to get the appropriate mix of house + contents to manage it.
    You could chose to get your own policy perhaps?
     
  14. Shogun

    Shogun Well-Known Member

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    While it might be possible to replace all 6 for $250k each.
    What will you charge me to project manage Google says 5% That leaves $237k per unit
    Google says $10k for 250m2 brick paving, relay and replace damaged. Now $235k left

    If only one up the back needs replacing. It will be a difficult build. Damage to brick paving, poor access for brick and concrete delivery. No storage area for materials. Reduced daily work hours? No economy of scale different rates by brick layers/tradesman to build/work on 1 or 6 units? Demolition you just can't walk a digger up the common driveway and back the truck up.
    Do you really want delays because chasing cheapest tradesman for every job.

    I suspect on your projects you leave a little for unexpected costs?

    I am just annoyed with other owners to save under $150 when you all ready save $200 each by group insurance
     
    Last edited: 13th Jan, 2020
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  15. Shogun

    Shogun Well-Known Member

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  16. Shogun

    Shogun Well-Known Member

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    Surely someone as s magic figure. If I built a unit for y to cover issues with rebuilding and keeping bank happy I insure at 1.5x y or 2x y
     
  17. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    This is true, rebuilding one unit is harder depending on it's location within the group
    I'm not really sure what your situation is to give concrete advice. A side by side would be different to 4 in a row etc
    If you can give a bit more details including size and original construction costs and age I might be able to give some better input.
     
  18. Shogun

    Shogun Well-Known Member

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    From
    Strata Titles Act 1985 07-g0-01 Xml

    Does this (below) mean if you have a Mortgage in a Strata you should be insured to amount owing on mortgage?

    You don't want to be under insured?

    Yes I am at the stage of getting Legal Advice