› Forums › Common Property › Is our Strata Over insured? › Current Page
@struggler said:
It reall would depend on what exactly your policy covers you for. For instance, does it cover landscaping?
When it comes to building, the price of a new home rarely reflects the actual cost. When you go to those display homes centres, the cost of building the new home often does not cover the exterior landscaping, driveways or even some of the features found on the inside. So if your insurance policy is for the rebuild of the actual structure only, then yes it would cost more to “complete” your complex to original should the unthinkable happen and the building was damaged to the extent you would need a rebuild.
The $500,000 more that your building is covered for is $125,000 per unit. It sometimes pays to look at extra costs by dividing by the number of units and see whether that cost is justified in that way. Check out your policy first and see what is covered.
Hi Struggler, As I said I have looked through the policy and the valuation, it appears that the valuation covers all that is needed. And my question was based on that.
Maybe in asking this question I am showing my extreme cyncism towards insurance companys but I just want to make sure that our OC is not caught out on a technicality or paying too high of a premium!
I accept that the specifics of any claim will depend upon the actual wording of the contract and you never usually exactly find out until you make a claim. But if we accept that it is a pretty standard contract are there any inherent risks associated with ‘over insuring’?
What I was after was a view on what are the risks associated with ‘over insuring’. For example, lets say as you point out ‘the worse happens’ or close to the worst say a claim for $1 milion dollars. Would the insurance company be entitled to scale back any payout because we were ‘over insuring’. I have been told companys do this for ‘under insuring’ eg saying you only insured for 75% of what you should have so we are only going to pay you 75% of any substantiated claim.
On the other hand if the insurance company is not entitled to adjust any claim the OC may be paying a higher premium than they have to. Which is just a waste of money.
Thanks