REPLACEMENT COST ESTIMATES FOR INSURANCE PURPOSES

In Australia, under-insurance for homes is a big problem—around 80% of houses don’t have enough coverage. If something like a fire or flood happens, their insurance might not cover the full cost to rebuild.

Why? Construction costs keep rising faster than inflation, but many insurance policies don’t keep up. Plus, people often don’t update their coverage after renovations or changes in building rules, leaving a gap between what they’re insured for and what it actually costs to rebuild.

This means many homeowners could face serious out-of-pocket expenses when they need to rebuild, simply because their insurance isn’t keeping pace with reality.

To address this critical issue, CPP Quantity Surveyors offers specialised services to help homeowners obtain an accurate and comprehensive replacement cost estimate, also known as a replacement cost estimate for insurance or insurance valuation. This detailed report provides an accurate evaluation of the expenses involved in rebuilding your home to its original specifications. Our assessment encompasses not only the direct construction costs but also additional expenditures such as demolition, design fees, Development Application (DA) costs, and anticipated cost escalation.

With a CPP Quantity Surveyors insurance valuation, you can ensure that your insurance policy is adequately aligned with the true costs of reconstruction and compliant with insurance companies requirements. This proactive approach helps safeguard against the financial shortfall that often accompanies under-insurance, providing peace of mind that your home is fully protected. By regularly updating your insurance coverage based on our comprehensive assessments, you can better prepare for the unexpected and secure the necessary funds to rebuild without compromise.

To prepare a comprehensive replacement cost estimate for insurance purposes, we will need a copy of your house plans, if they are available.

Once we have the plans, our process involves two key steps:

STEP 1

Plan Review & Property Inspection: We will thoroughly review the provided house plans and conduct a detailed on-site inspection of your current building. This dual approach allows us to capture both the architectural details and the real-world condition of the property.

STEP 2

Replacement Cost Estimate Preparation: Based on our review and inspection, we will create a detailed like-for-like replacement cost estimate, assuming the property is completely destroyed prior to your policy expiration date. This estimate will cover the full scope of reconstruction costs, including:

• Demolition: The cost to safely demolish and remove the remains of the damaged dwelling.
• Design and Professional Fees: Expenses related to architectural design, engineering, and other professional services required to rebuild.
• Development Application (DA) and Authority Fees: Fees associated with obtaining necessary approvals and permits from local authorities.
• Construction Costs: The cost of rebuilding in accordance with current building codes and standards.
• Cost Escalation: Accounting for potential increases in construction costs from the disaster date until project completion.

The final insurance valuation report will also outline all assumptions and details considered during the preparation of the estimate, providing transparency and clarity about how the replacement cost was determined.