Advertise Here


IconAccounting & Tax
IconAppraisers & Valuers
IconArbitration Services
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompany Secretarial Services
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFire, Storm, Flood Damage Specialists
IconForensic Investigation Services
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOutbound Sales
IconOutsourcing Companies
IconPolicy Administration
IconPremium Financing
IconPublic Loss Adjustors
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
  Subscribe To »

Common customer complaints in the insurance valuations industry






Insurance valuations company, Mirfin, shares this article featuring a number of typical customer complaints in the industry. Along with the complaints, they include their response for a broad insight into common insurance valuation matters.
"How can you value my house at over R3 million when I can't get R2 million in the market?"
This was the reaction from a trustee in a sectional title complex where we recently conducted a replacement cost valuation in preparation for the body corporate's upcoming policy renewal.
Mirfin’s response to this query was as follows:
"The purpose of the valuation is not to determine market price but to assess the cost to replace your and other units in the event that (the complex) should be struck by disaster. Our recommended sum insured includes expenses for demolition and rubble removal, architects, engineers, land surveyors, municipal fees, electrical installations, VAT and - not least of all - your unit's share in the common property."
"My friend - who is a building contractor - says that it should cost no more than R7,500 per m2 to construct my house; yet, your replacement cost valuation arrives at more than R10,000 per m2. How is this justifiable?"
Mirfin: "Did your friend consider the cost of the specialised foundations required in the particular location of your property? Does his estimate include the costs for demolition works, rubble removal, professional fees and other costs which may apply, depending on the degree of damage to your house in the event of a claim? Did your friend offer you a written quotation to which he can be committed in the event of total destruction of your building? Will he stand accountable if his estimate has caused you to be underinsured?"
"The purpose of requesting the valuation was to reduce our insurance cost; yet, your assessment increases the replacement value to the sole benefit of the insurers."
Mirfin: "The objective of a professional replacement cost valuation is not to reduce the insurance premium but to determine the correct sum insured, thereby safeguarding your life investment."
"An estate agent informed me that I can sell my house for more than your valuation indicates."
Mirfin: "The estate agent seems not to understand the difference between market value and replacement cost: Market Value is defined as the price at which a property should exchange hands between a willing seller and a willing buyer in an arm's length transaction after proper marketing; Replacement Cost is the actual cost to replace a structure to its pre-loss condition including the cost of demolition, rubble removal and associated professional services. Apart from that, it should be considered that the estate agent may have an ulterior motive in offering free (and unqualified) valuation advice."
"I am in the construction business and I can re-build my house for a lot less than what you have quoted. Please reduce your valuation, else my insurance premium will go through the roof."
Mirfin: "It is advisable to insure one's property to a market-related replacement cost. Would your wife and kids be able to re-build the house if something were to happen to you?"
In summary: Unfortunately, many property owners and bodies corporate are underinsured - by up to 50% - and most insurance brokers agree that educating clients is the key to having happy clients.
Visit our website at for more information. 
Source: Mirfin Valuation Services
« Back to previous page Print this page » |

Breaking News »


Where to start for SA businesses?   09 July 2020: Parts of the long-awaited Protection of Personal Information Act 4 of 2013 came into force on 1 July 2020, and companies will have a period of one year ...
Read More »


Asia Corporate Payment Survey 2020: COVID-19 will overturn last year’s incipient recovery

After a 2019 that was dominated by trade tensions between the United States and China, Coface has observed an incipent recovery in Asia (excluding China), supported by supply chain shifts and additional liquidity ...
Read More »


Coface finalises the acquisition of GIEK Kredittforsikring AS

Coface announces the closing of the acquisition of GIEK Kredittforsikring AS, a company created in 2001, and owned by the Norwegian Ministry of Trade, Industry and Fisheries, that manages a short-term export credit ...
Read More »


Are corporate balance sheets in Spain and Italy ready for the COVID-19 shock?

Although the second quarter of 2020 is shaping up to be the most challenging period of the year, there are now good reasons to think that the road to recovery will be long and arduous. Despite immediate tax deferrals, ...
Read More »


More News »


Healthcare »


Investment »


Life »


Retirement »

Advertise Here
Advertise Here

From The Glossary »



The actual annual interest payment on a bond, gilt, promissory note or other fixed income security. (usually paid six-monthly).
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2020. All Rights Reserved.