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Mr Sadlier said at the time the cost of building an average Aussie home in capital cities such as Sydney, Brisbane and Melbourne had risen by over 10 per cent in the year to date.<\/p>\n
\u201cGiven the median construction cost for homes in these cities was around $485,000 that was a price rise of over $48,500 in half a year, but this was just an average,\u201d he said.<\/p>\n
\u201cMany properties in inner-city suburbs have construction costs well over $1 million.\u201d<\/p>\n
Mr Sadlier also noted that the average construction program had increased by as much as an additional 16 weeks due to material and trade shortages.<\/p>\n
\u201cReal costs would have gone up by 15 per cent or more once these delay costs were accounted for,\u201d he said.<\/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 since last year, the situation had only worsened.<\/p>\n
\u201cPrior to the pandemic, insurance council numbers suggested 83 per cent of owners were already underinsured,\u201d he said.<\/p>\n
\u201cWe now believe the percentage is far higher, in fact, I\u2019d be surprised if it wasn\u2019t closer to 100 per cent of owners at risk right now.\u201d<\/p>\n
Mr Sadlier said that there had been a \u201ctriple whammy\u201d of causes for underinsurance in 2022.<\/p>\n
\u201cConstruction costs have continued to blow out substantially,\u201d he said. \u201cMaterials such as timber, glass and steel have seen around a four-fold increases in their cost, add in that labour is already in huge demand with premiums being demanded by good-quality builders.<\/p>\n
\u201cAlso, supply chain issues have elevated the cost of shipping which has risen by multiples in some cases.<\/p>\n
Mr Sadlier said that they have found that most owners self-assess their insurance value when renewing their policy, and then put it in the bottom draw and forget about it.<\/p>\n
\u201cIt\u2019s uncommon to find an owner who gives more than cursory thought as to what their rebuild might cost, so it\u2019s rarely updated,\u201d he said.<\/p>\n
\u201cAll in all, it\u2019s simply going to cost far more to rebuild or repair your home now than it would have six to 12 months ago when you last renewed you insurance policy.<\/p>\n
\u201cThe goal of a proper insurance figure is to return you to the same financial position you were in prior to the insurable event, that\u2019s not covered by the simple cost of building a replacement home.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
WITH the recent tragic events in NSW and Queensland unravelling before our eyes, the issue of underinsurance has again been raised. Marty Sadlier, director at MCG Quantity Surveyors, said the recent floods and storms will likely trigger a wave of underinsurance that could end up costing property owners hundreds of thousands of dollars. \u201cRecent weather […]<\/p>\n