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\u201cGiven the median construction cost for homes is around $485,000 that\u2019s a price rise of over $48,500 in half a year.<\/p>\n
\u201cBut this is just an average, many properties have construction costs of closer to $1 million.<\/p>\n
\u201cIn addition, the average construction program on these sites have increased by as much as an additional 16 weeks due to material and trade shortages.<\/p>\n
\u201cAs such, there are plenty of cities and towns where real costs have gone up by 15 per cent or more for the end user once these delay costs are accounted for.<\/p>\n
\u201cAlso, this only allows for construction costs, insurance is also supposed to cover additional outlays such as professional fees, council charges levees and even emergency accommodation, all of which add to the end amount.\u201d<\/p>\n
Mr Sadlier said underinsurance was already rife across the nation but current conditions are making this far worse.<\/p>\n
\u201cThe Insurance Council of Australia are quoted as saying that prior to the pandemic, 83 per cent of property investors were already underinsured,\u201d Mr Sadlier said.<\/p>\n
\u201cBut given the recent hikes in materials and labour costs, I\u2019d be surprised if we weren\u2019t closer to 100 per cent of owners at risk.\u201d<\/p>\n
Mr Sadlier said property owners can undertake a three-step solution to ensure they\u2019re adequately covered and not disadvantaged.<\/p>\n
\u201cNumber one you must update your property\u2019s insurance value regularly, at least very year.<\/p>\n
\u201cSecondly, don\u2019t use \u2018online insurance calculators\u2019 to assess your property\u2019s replacement cost. We\u2019ve seen real-life instances where online calculators have been more than 65 per cent below the true replacement cost of a dwelling.<\/p>\n
\u201cKeeping up to date with the construction costs requires diligence and accuracy.<\/p>\n
\u201cYou should only use professionals, like certified quantity surveyors, to accurately confirm replacement values for insurance purposes.<\/p>\n
\u201cFinally, shop around for insurance options, a hike in value can mean an increase in your premium.<\/p>\n
\u201cMake sure you use a reputable insurance broker to confirm you\u2019re paying the right price for your insurance.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
A leading quantity surveying firm has said Australian property owners are at immediate risk of a massive but preventable insurance blow. MCG Quantity Surveyors said that a surge in construction costs and labour during COVID has put homeowners at extreme risk of underinsurance, which means some homeowners could be just one disaster away from financial […]<\/p>\n