An online solution suits my needs. But does a shortfall of $300,000 suit my budget?
Insurance Advisory Service met with investment property owner, Greg Hartley.* Greg had owned a block of units for more than 20 years and he had always personally estimated the valuation of his units.
Greg’s Business Property Insurance was due for renewal, and upon a friends recommendation, he decided to use Insurance Advisory Service to assess his policy and estimated replacement value.
Greg’s estimate of replacement value for the block of units had been assessed at $2 million dollars, so he was surprised when Insurance Advisory Service advised him that the recommended replacement value in fact, $3 million dollars based on software that Insurance Advisory Service utilises for their clients.
Deciding to err on the side of caution, Greg accepted our recommendation.
Outcome: Greg is now in a stronger position should a claim for the units occur.
Had he remained with the previous policy sum insured of $2,000,000 and a total loss claim had occurred, he would have been under-insured and incurred a financial loss of more than $1,000,000.
Lesson: Obtain property values from a reputable source regularly and ensure that you review your policies each year in detail.
*Real names are not used due to client confidentiality