Be cautious when reducing your sums insured
The economic recession has led to significant reductions in the market values of buildings. The has led to some property owners questioning whether there has been a similar reduction in reinstatement values and whether building sums insured should be similarly reduced. Whilst tender prices are fairly stagnant, material and labour prices are continuing to increase. In effect, contractors are reducing their margins to win new business and will look for every opportunity to make up lost margins when on site. Already there has been an increase in adjudications as contractors become more claims conscious.
In short, it is important to ensure that sums insured are not reduced and that buildings are appropriately insured. Whilst clients may be looking for savings in these troubled times, it is important that this is not at the expense of reduced insurance cover. If there is underinsurance, any claim payout could be significantly reduced to such an extent that the building cannot be adequately reinstated.
Property owners and others who manage buildings may not have sufficient reserves to deal with the consequences of underinsurance and a bank loan to cover the cost may now be more difficult than ever to secure. Moreover, Management Companies, Directors, Trustees and others who are responsible for arranging insurance cover may find that they are liable if they have not taken steps to arrange and maintain adequate insurance cover.
Good broker advice and the importance of an up to date reinstatement cost assessment cannot be underestimated.
Roger Corp BSc Hons ACII FCILA FUEDI-ELAE
Director
Barrett Corp & Harrington Ltd & BCH Authentica, 35A Southover, Wells, Somerset BA5 1UH
Contact: 07984 544444 or 01749 679145
Email: roger@bch.uk.com
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DISCLAIMER
Any external products and services listed do not necessarily carry the endorsement of retirement-flat-living or imply a recommendation. retirement-flat-living.co.uk does not recommend any of the advertisers and cannot be held responsible for any work undertaken by or purchased from any advertiser on this site.
Whilst retirement-flat-living makes every effort to ensure that the articles included in the web site are accurate at the time of publication it is inevitable that, as time goes by and circumstances change, the articles may contain out of date information. Readers are strongly urged to check the content of these articles before taking any action that could have legal or financial consequences. retirement-flat-living shall not be liable for any loss, damage or inconvenience arising from inaccuracies.