Check your replacement sum insured .. its important

Its been almost a year since our rental property insurance and holiday home insurance policies started converting from an open ended cover based on size to a specified replacement sum insured.  A year on we continue to stress the importance of insuring rental properties and holiday homes correctly.

In the event of a major loss it is crucial that your sum insured is an accurate reflection of the actual cost to replace your property.

Just a reminder; the replacement sum insured is the amount it would cost to replace your property with modern equivalent construction materials, and should include the costs of demolition, professional fees, inflation and site improvements such as fencing, swimming pools, landscaping, retaining walls and driveways.  As one could imagine this is a very difficult figure to calculate without a knowledge of materials costs and building techniques.  This is why we encourage rental property insurance holders to get professional advice from a valuer or at the very least use an online replacement calculator such as Cordel:  Online replacement calculator 

Having fielded many queries from landlords, rental property insurance and holiday home insurance holders we have some myths to bust:

1.  The government valuation (GV) has nothing to do with the replacement value of the dwelling

2.  The market value or purchase price of your property has NO bearing on the replacement value.

3.  Demolition and removal of debris is very expensive.

4.  Building techniques and compliance are NOT the same as when your dwelling was first constructed.  Local authorities may not allow you to build ‘what you had’.

Always feel free to contact us if you have any further queries.  Initio online insurance is a specialist rental property insurance, landlord insurance and holiday home insurance provider.