In the current climate of record-breaking inflation, it’s vital that customers appreciate the necessity of professional valuations for replacement and rebuild costs.

During a recent webinar Underinsurance: Are you covered?, Gallagher claims manager David Cook used several case studies to graphically illustrate the potential depth and seriousness of underinsurance in Australia and New Zealand.

The first, he says, involved a client who owned a mixed-use shopping centre in a small regional town. An electrical fire caused significant damage to the premises.

The declared value had been discussed during the last renewal, but the client didn’t want to spend money on a formal valuation. Instead, the client agreed to increase values by 10 per cent, which came to a total $1.65 million.

However, the real value at risk was closer to $3 million, with the cost of repairs calculated at $1.5 million.

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