Rising construction costs
Is your building cover actually enough to cover you?
Like most things in life the cost of construction is rising. Building materials, fittings and labour can all be affected. This means each year it becomes more and more expensive to repair or replace the same buildings in the event of major damage, be they part of your home or your business.
The cost of replacing your home or business premises, or even just parts of it, is substantially more than 10-20 years ago. Last year industry research company Macromonitor looked into the issue of rising construction costs, releasing a report titled ‘Australian Construction Trends 2014’. Amongst other statistics, it identified the annual increase in construction costs more than doubled in just 12 months, rising from +1.3% in 2013 (compared to 2012 costs) to +3% in 2014.
This is obviously concerning news for those looking to build or renovate. But what does it mean to home and business owners who already have their property?
One important consideration should be the impact of natural disasters. Take South-East Queensland, for example. Following several catastrophic floods earlier in the decade most people who live or own a business in the regions of Brisbane and the Lockyer Valley would now be well aware of whether their property insurance includes flood coverage. Sadly, many learned the hard way they weren’t covered – or weren’t covered adequately to rebuild at today’s prices.
Now is the time to do your homework to ensure you wouldn’t find yourself in a similar position. After all, if a natural disaster occurs, the last thing you need to be calculating is if you have enough insurance to replace or return your property to its former self.
Of course, the increasing instance and expense of natural disasters has also lead to rising insurance premiums. This has seen many households and business owners restricting their level of cover and hoping for the best. While perhaps understandable, it’s a decidedly dangerous game.
There are many options out there nowadays. So it’s well worth taking the time, just once a year when your renewal is due, to review your policy and today’s construction costs to ensure your property continues to be adequately covered. One day it could make all the difference to your ability to bounce back from a natural disaster.
Lewis Insurance Services is here to help our clients with providing estimate building replacement cost calculators & putting our clients in touch with qualified Quantity Surveyors to assist in providing replacement cost valuations for domestic and commercial buildings. To discuss further, please contact Lewis Insurance Services on 07 3217 9015 or send us an email at firstname.lastname@example.org .
This article was published by our AFSL Licensee, Insurance Advisernet Australia P/L (06/07/2016)
This information and any accompanying material does not consider your personal circumstances as it is of a general nature only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances and considering the Product Disclosure Statement.