No excuse for varying insurance valuations, say quantity surveyors
The New Zealand Institute of Quantity Surveyors says there is no excuse for homeowners to receive property insurance valuations that vary widely.
Registered quantity surveyor and president of the New Zealand Institute of Quantity Surveyors, Julian Mace, says the Institute has adopted a standardised approach to providing property insurance valuations and ensuring they are accurate.
“We developed this in conjunction with the insurance industry specifically to ensure homeowners got accurate data and could rely on the insurance valuations provided by registered quantity surveyors,” he said.
Mr Mace said the variations in many insurance valuations could be attributable to the people providing them not being skilled quantity surveyors whose speciality, training and qualifications are in construction measurement and assessing building costs.
“A valuer is often giving you a market valuation, whereas a quantity surveyor looks at the actual cost of rebuilding and replacing all the external items such as pathways and fences on a property.
“A market valuation and a build cost are two very different things.”
Mr Mace said the difference is even more pronounced when comparing an architecturally designed house with one built by a group housing franchise.
He said a second factor in the wildly varying insurance valuations is the allowance made for ‘escalation’.
“That’s a complicated issue which requires a detailed knowledge and understanding of what drives building costs and how those costs might change over the period of the insurance or, more importantly, in the often lengthy period before a rebuild can take place.
“That wait can sometimes be two or so years and building costs will change, sometimes dramatically in that time, as new technologies are implemented or new building materials and standards take effect.
“To be safe, homeowners should have their insurance valuation reviewed every year to allow for escalation, and re-done completely if they have renovated.”
Mr Mace said homeowners seeking insurance valuations can have confidence that a registered quantity surveyor who is a member of the New Zealand Institute Quantity Surveyors has a strict code of ethics and quality assurance criteria by which they must abide.