REINSTATEMENT
(REPLACEMENT) (R & R) POLICY – INSURANCE
Under
most strata schemes the body corporate or owners
corporation
must insure all the buildings on the block for their full replacement
value. Therefore, the cover should be a replacement
(R&R) policy
and should include the following:
- cost to rebuild (after expected increases in
building costs)
- expected increase in the cost of building
- demolition
- removal of debris (cleanup)
- all fees and contributions.
It
is recommended that a valuer be employed to determine the replacement
cost as the above parts require a thorough knowledge of current
building costs, fees etc. The replacement should be for an equivalent
building. A typical reinstatement definition is as follows:
- where the
property is destroyed, in the case of a building the rebuilding thereof
or in the case of property other than a building the replacement
thereof by similar property, in either case in a condition equal to but
not better or more expensive than its condition when new.
- where the
property is damaged, the repair of the damage and the restoration of
the damaged portion of the property to a condition substantially the
same as but not better than or more expensive than its condition when
new.
See
extra
cost reinstatement