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Newsletter September 2010How To Take The Mystery Out Of Valuing Or The Cost Of Replacing A Period (Pre- 1940) Building If Its Destroyed By Fire Over the last 5 years in particular, Moss Brothers have been regularly contacted by Insurance Companies, Loose Adjusters and Registered Valuers (combined – ICLARV) from around the country. What they are asking is, "because you specialise in designing and building New Zealand (and some English) period (pre 1940) architecture can you offer any help to accurately value an existing older building, or how do we cost an old building that has been destroyed by fire"? I suppose you could say we've become the 'go to' firm for this kind of information. I'm not sure how many types of insurances policies are available for covering the replacement of a building in the case where it is destroyed. But however, the 2 that come to mind are 'total replacement' without a specified sum, and other based on a 'set value' or sum. And I can imagine there would be many variations to these 2 and personal circumstance would be a contributing factor. As well as the ICLARV contacting us, home owners whose property has been destroyed by fire have also done the same. Their concern generally is that the insurance company is only willing to replace size for size and not replacement. If you've had an old period home and love the look and feel of it and it's is destroyed then you'd be expecting it to be replaced – right? Well – you'll be in for a fight to get that. What I'm hearing from the owner is, "The insurance company doesn't want to replace a house with 10 or 12 foot ceilings/stud. They don't want to replace the house with all of the ornate decorations. And they don't want to replace the house using native timbers. I feel I'm being taken for a ride or forced into something I don't want". I personally believe it's fair, reasonable and know it's possible for the owner to have their old period home, homestead or building that is destroyed by fire or in an earthquake to be replaced and have it look and feel (almost) the same as what it was before the disaster. However it not fair, reasonable or possible to have it rebuilt using the same materials – they're simply are not available. One Moss Brothers enquirer agreed with us to the point they followed our advice to the letter. And because of that and being hardnosed and persistent, they got the outcome and payout from their insurance company they believe they deserved. There is only one way to know exactly what your replacement will cost and have the facts and ammunition to fight if need be. A couple's 1915 villa was destroyed in a fire. They employed our architectural design service to prepare concept plans and specifications of the original house. Remember, I said the same look and feel but not the same materials. Yes the client invested about $15k in concept plans and specifications but having the documentation meant we could also provide them with an accurate rebuild/replacement figure. In the end not only did the insurance company pay for the design fees but as mentioned they also paid the replacement value based on the costings (or similar) we provided.  The other, very much cheaper way is for a Valuer, an insurance company representative, and the owner get round the table and agree to a figure and what should be covered. It may also be useful to have a reputable builder or an architect sit in of the meeting. Obviously the lower the value the lower the premium but this could have enormous repercussions if there is a disaster and the sum agreed was a couple of $100k short, which it could easily be in the case of a substantial building. Unfortunately, from what I am hearing most people are not doing due-diligence and taking an even cheaper option of just guessing what a replacement value should be an hoping it never happens to them. Or, Moss Brothers can also provide this service. I must confess Moss Brothers did not design or build this. The architect was English but the builder was William Upton – my grandfather (building runs in the family) – built in Masterton about 1918. I've been asked what it would cost to replicate it – as a guess round $1.5m – stunning ah? If you'd like a chat, give me a call at 04-293-8039 or email me the best time and day to call you.
Kind Regards Julian Moss
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