Sum-insured valuations

Construction Cost Consultants is a professional quantity-surveying company. It’s been in business since 2010 and offers residential insurance valuations nationally. A registered quantity surveyor did our valuations.

Prendos NZ is a national property consultancy company in business since 1988. Staff members include registered valuers, quantity surveyors, architects and structural engineers. Its valuation team draws on data from its in-house quantity surveyors as well as the market in general. A registered valuer did our Wellington valuation while the Auckland valuation was peer-reviewed and signed off by a registered valuer.

QV (Quotable Value) is a state-owned enterprise. It was formed in 1998 and has usually been associated with providing market valuations by registered valuers and rating valuations for local authorities. It also provides residential insurance valuations.

Sum Insured Associates, one of the new companies in the sum-insured assessment game, was set-up in July 2013. Company director Scott Stevens did both our valuations. He doesn't belong to PINZ or NZIQS. His business card doesn't state his qualifications.

Telfer Young was established in 2000 when eight independent property valuation practices came together. It has registered valuers in 11 offices nationwide.

The contracts used by some companies providing valuation services include clauses attempting to limit their liability – or in the case of Sum Insured Associates, accepting no liability of any kind. However, the Consumer Guarantees Act (CGA) requires services to be provided with reasonable care and skill. A business can’t limit its liability under the Act when providing services to consumers.

The limitation-of-liability clauses we’ve seen – which attempt to limit liability to particular amounts or exclude liability for consequential loss – risk misleading consumers about their legal rights under the CGA and should be removed. We believe contracts should clearly set out consumers’ rights under the CGA.

Your insurance isn’t just in case of a disaster tomorrow. It’s for anything that happens in the next 12 months until your policy renews. And in those 12 months – and right up until your house is rebuilt – costs will be increasing. That’s why it’s important a provision for inflation is included in your valuation report.

The provision for inflation used by quantity surveyors and registered valuers takes into account the time required for damage inspections, demolition, preparation and approval of proposals and plans, tenders and construction.

However, the provision for inflation usually excludes any allowance for delays because of the need to comply with the Resource Management Act.

Give your insurer the reinstatement cost, demolition cost and inflationary provision when you set your sum-insured figure. The total should be your sum insured. Not all the reports we got made this clear and not all insurers are asking for this detail.