09 Nov With recent escalations in inflation have you considered if your property is underinsured?
With recent escalations in inflation have you considered if your property is underinsured?
Recent escalations in construction costs mean that if your property has not been valued in the past 12 months, there is a likelihood it is underinsured.
The importance of having adequate levels of insurance is more critical than ever given the proverbial perfect storm of events that has led to contractor shortages and soaring inflationary costs across the construction sector.
In recent correspondence, CHU Underwriting Agencies provided the graph below, which demonstrates how sharply the cost of construction has risen and is well outpacing CPI, with the steady increase seen from the advent of COVID now a far steeper increase for in 2022. When you overlay CHU’s actual sum insured profile from across it’s strata property portfolio, it is clear that sums insured are not even keeping pace with the CPI% in the graph, let alone the construction pricing index.
Source: Australian Bureau of Statistics – Reference period June 2022
Regardless of specific legislation across Australia, it is important to ensure that property owners will have adequate protection for their asset.
Frequency of catastrophe events continues to rise, which could mean the chances for an insured to suffer a loss are also on the increase.
CRM Brokers strongly implores all clients to review when their property sum insured was last updated and obtain a valuation if necessary.
If you have any questions or would like to discuss sums insured, please feel free to contact your CRM Broker on 1300 880 494.
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