Valuation not estimation
Following the 80 mph winds that were experienced across the country at the end of October, the Financial Times reported that the broker Willis Re forecast losses in the UK of between £300m and £500m. The effect of extreme weather conditions is only one of the risks to business premises, and buildings insurance provides cover for a wide range of eventualities. However, with an estimated 500,000 properties underinsured, their owners or occupiers may not be adequately protected from significant financial loss.
“Underinsurance has always been an issue”, explains Nigel Berry MRICS, one of Fenn Wright’s chartered surveyors, “Because many business premises are infrequently or inexpertly valued. Traditionally, insurance may have been bought via a broker who could provide advice based on a good historic knowledge of their client’s portfolio, or they referred their client to a chartered surveyor for a reinstatement valuation. Increasingly though, businesses are arranging their own cover via the web, which removes this opportunity for a professional sense check of their own estimates.
He added: “During a recession, its understandable that people may become more focussed on the cost of their insurance premiums and feel less inclined to pay a valuation fee. However, if you are a landlord, there may be provision within your lease for you to claim back the costs of assessing the rebuild valuation, from your tenant(s). On the other hand, if you are a tenant with responsibility for insuring the premises you may have a duty, under the terms of your lease, to make sure that there is adequate cover in place. A failure to do so will leave you liable for any shortfall between the sum insured and the full cost of reparation when the insurer only meets a proportion of your claim.
“Fenn Wright can prepare a professional reinstatement valuation in accordance with the RICS guidelines for any property. Where we have provided this service to landlords with large portfolios, some have seen savings in their premiums as a result.”
To discuss this issue and get a competitive fee quote for your premises please get in touch with Nigel Berry MRICS.