A Hamilton quantity surveyor says many New Zealanders are badly undervaluing their homes against loss following changes in housing insurance.
Rex Petersen specialises in valuing homes for insurance purposes and says he has looked at some that were $50,000 to $250,000 undervalued for rebuilding costs.
Most insurance firms require homeowners to nominate a fixed rebuilding cost. Photo: RNZ
In the aftermath of the Christchurch earthquakes, most insurance companies require homeowners to nominate a fixed sum to be insured.
Mr Petersen said many homeowners are not getting a valuation expert to provide an accurate figure and are setting the sum too low, so would be out of pocket if they ever had to rebuild.
He said he had been fielding many inquries since the earthquake in Wairarapa on 20 January, which had served as a reminder to people to take action.
The Insurance Council agrees some people undervalue their houses and recommends homeowners do a thorough investigation or get a professional to work out the rebuilding cost.
Registered Master Builders Association chief executive Warwick Quinn said insurance should also allow for inflation if there are delays in rebuilding. "Just getting a cost on what it would cost to build a house today may fall well short when a claim is due."
