Valuations for Insurance ?

Most readers here will know the Owners Corporation is required to have the building valued for Insurance at least once every 5 years in NSW.

At the last AGM Owners voted for a new valuation. 

Later , with no notice given nor permission sought of Owners nor even of Executive Committee members , our Strata Manager disclosed the amount of money the building was insured for to the new chosen Valuer.

This is ridiculous , because Valuer can then use that amount and simply increase it by some amount they think relevant and present that as current value , without having done a thorough assessment to determine true value.

We could have simply left the standard + 5% per annum increase for the current year’s Insurance renewal that the Insurance Broker had applied.

After complaint to Strata Manager he informed us that this is Standard Procedure – disclosing the current Insured Value to Valuers – and he and the Management Company will not accept liability for acting contrary to the interests of the Owners Corporation.

He said all Insurance Valuers request that information , but so far as we know the Valuer did not request it but was simply given it at the time they were engaged to do the valuation.

What use is a Valuation that is an estimate based on a a previous value that is simply an accumulation of + 5% every year , and that since apparently a similar estimate done previously ?

Actual increases of costs of materials and construction do not average out at 5% per annum , thus our building could be substantially over-insured or under-insured by now after years of the above , and I’ll guess at under-insured.

Please , any readers here with knowledge and/or experience of building insurance , is this statement by Strata Manager of “Standard Procedure” actually correct for NSW ?

… and , are there any Valuers in Sydney who will take on a Residential Strata request and do a thorough assessment of the true value with regard to replacement costs based on current market prices , and who do not cheat by using some-one else’s guesstimated value ?