“Price is what you pay; value is what you get” – Warren Buffet

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Cost and Value are not related, so insuring a property for its market value is erroneous.

 

Consider:

• you do not insure land, only what is built on it;

• buildings depreciate, therefore their value decreases over time – but you can’t build an old building;

• remaining unusable material must be removed from the site before construction can begin;

• even if it is exactly the same as the old building, the new building must still be designed;

• reconstruction of the asset should match what existed before the loss, as closely as possible.

• many buildings were built before today’s rigorous engineering and construction standards or have important design features that are less readily available today.

 

A Registered Quantity Surveyor can provide you with comfort that such considerations are included in a Reinstatement Estimate for Insurance Purposes, used as basis for your insurance sum.

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