When rebuilding requires a change in building materials and upgraded structural elements due to site specific limitations to meet consent criteria how do insurers identify any increased costs resulting from this in a 'build to budget'? Who is responsible to meet any increased costs in this situation?
Asked: 27 March 2014
AA Insurance advises:
All consenting and compliance requirements must be met during the rebuild. If the home is to be “built to a budget” we may have to change the construction plans in order to meet the approved budget .
IAG don’t provide a build to budget programme.
Lumley do not use the ‘build to budget’ model for our rebuild properties. The build cost is always based on the insured or actual area of the property taking in to account the specifications, location and quality of the property (where necessary). If there are changes to the material specifications as a result of consent criteria, we take on board the requirement to change and the full costs of such are covered by Lumley. Therefore there is no need to separate the associated ‘additional costs’ out of the total rebuild price when contracting these types of works.
Southern Response advises:
In order to arrive at the Flexibuild (Build To Budget) sum, Southern Response takes these aspects into account when establishing the replacement value of the original house, along with any other costs which are compliance driven (for example; enhanced foundations, lightweight cladding, structural reinforcing). Please see www.southernresponse.co.nz for further details (key words = build to budget)
Providing we are rebuilding to the same specifications and size as the existing house, TOWER will cover the cost of change in materials to meet the current building code.