Insurance Valuation of Strata Buildings in a Changing Market

Insurance Valuation

Receive an
obligation-free proposal

We offer an obligation-free quote.

The first step is a short phone or in-person meeting to better understand the needs of your committee and scheme. This will only take around 10 minutes.

From there, we’ll put together a tailored proposal, including our easy-to-understand fee package.

Submit our proposal form, including the best contact time, and we’ll be in touch.

Receive an obligation
free proposal

We'll need to get some details about your building. Let us know the best time to contact you.

Receive an obligation-free proposal

We offer an obligation-free quote.

The first step is a short phone or in-person meeting to better understand the needs of your committee and scheme. This will only take around 10 minutes.

From there, we’ll put together a tailored proposal, including our easy-to-understand fee package.

Submit our proposal form, including the best contact time, and we’ll be in touch.

Receive an obligation
free proposal

We'll need to get some details about your building. Let us know the best time to contact you.

This article has been reproduced with the permission of Quality Building Management (QBM).

Strata buildings, also known as condominiums or apartment complexes, are a type of property that can be challenging to value for insurance purposes. This is because strata buildings often have unique features, such as shared spaces and amenities, that need to be considered. Enter a complex property market and an insurance valuation becomes even greater of a challenge.

These changes in the property market can impact the insurance valuation of strata buildings. Read on as we explore some of the factors that can impact the insurance valuation of strata buildings in a changing property market.

Property Values

Property values are among the most significant factors that can impact the insurance valuation of strata buildings. When property values rise, the cost to rebuild a strata building also increases. This means that the insurance coverage and premiums for the building may need to be adjusted to reflect the higher value. Conversely, if property values decrease, insurance valuations for the building may need to be revised downward to reflect the lower value.

Building Materials And Construction Costs

The cost of building materials and construction can also impact the insurance valuation of strata buildings. When building materials and construction costs rise, the cost to rebuild a strata building also increases. This means that the insurance coverage and premiums for the building may need to be adjusted to reflect the higher prices. It’s important to note that some building materials may have a higher replacement cost than others, which can impact the insurance valuation of the building.

This is a critical consideration when managing a strata building with a sinking fund. This step provides a clear picture in the event of damage requiring repair.

Age Of The Building

The age of a strata building can impact your insurance policy as well. As buildings age, the cost to replace or repair them may increase due to wear and tear, and potential outdated building codes. Therefore, the insurance valuation for an older strata building may be higher than that of a newer building, even if the newer building is more expensive to build.

Building Code Requirements

Building code requirements can also impact insurance valuations of strata buildings during a volatile property market. For example, if a building is required to meet new building codes due to changes in the property market, the cost to rebuild or repair the building may be higher than it was previously. This means that the valuation for the building may need to be adjusted to reflect the new building code requirements.

Location And Environmental Factors

The location of a strata building and environmental factors, such as natural disasters and climate change, can also impact its insurance valuation. Buildings in areas prone to natural disasters, such as floods or earthquakes, may require higher strata insurance coverage to protect against potential damage. Similarly, if there are concerns about environmental factors such as soil instability or coastal erosion, the insurance valuation may need to be adjusted to reflect the potential risks.

The insurance valuation of strata buildings can be impacted by various factors, including property values, building materials and construction costs, the age of the building, building code requirements, and location and environmental factors. It’s essential to keep up with changes in the property market and regularly re-evaluate the insurance valuation of a strata building to ensure that it is adequately protected in the event of an unforeseen incident. Working with a trusted valuation company, such as Quality Building Management, can help strata building owners and managers navigate these complexities and ensure that their building’s insurance coverage is up-to-date and accurate.

This article was written by Quality Building Management (QBM).

Share This Post

Subscribe To Our Newsletter

Is BCsystems your current body corporate manager?
You are

More To Explore

Enforcing by-laws as a body corporate
By-laws

Enforcing by-laws as a body corporate

Enforcing body corporate by-laws involves a multifaceted approach with responsibility shared across the body corporate and owner or occupiers. In this article, we look at the specific process of enforcing by-laws as a body corporate.

Changes to the BCCMA
By-laws

Upcoming changes to the body corporate and community management act: What you need to know

The landscape of body corporate regulation in Queensland is on the brink of significant transformation as the commencement date for the Body Corporate and Community Management Act (BCCM Act) amendments draws near. With reforms set to take effect from May 1, 2024, residents and stakeholders are advised to prepare for legislation that will reshape the operations of bodies corporate across the region. This article looks at the noteworthy changes of the Act and how will they impact community living in Queensland.

Like this article?

Follow us for more