The Relationship Between Building Reports and Insurance Companies

When thinking about building reports, most people typically associate them with the buying or selling of a property. However, what many may not realise is that these reports are also highly relevant in dealings with insurance companies. In fact, there are several situations where having a detailed building report can be essential for obtaining or adjusting your insurance coverage. Understanding these scenarios can help you navigate the insurance process more smoothly and ensure that you’re adequately protected.

Building Reports During the Buying Process

One of the most common times a building report becomes necessary is during the process of purchasing a home. While it’s widely understood that a building report might be needed to secure financing from a lender, it’s less commonly known that insurance companies may also require one. If you’re buying a property in an area with a history of natural events, such as earthquakes, the insurance company might ask for a building report to assess the current state of the property. This is particularly relevant in areas where there has been an EQC (Earthquake Commission) claim. In such cases, the insurer may require a sign-off from a building inspector to confirm whether the repairs from the EQC claim have been completed satisfactorily. This extra step helps the insurer manage their risk and provides you with peace of mind that the home is insurable.

Adjusting Your Insurance Policy

Another situation where a building report might be required is when you’re looking to make changes to your existing insurance policy. Perhaps you’re considering increasing or decreasing the sum insured value, or maybe you want to add more inclusions to your policy. In these cases, your insurance provider may request a new building report to ensure that the updated coverage accurately reflects the current condition and value of your property. This is particularly important if significant renovations or changes have been made to the home since the last report. By providing an up-to-date building report, you can help ensure that your insurance policy remains accurate and comprehensive.

Shopping Around for Insurance

In today’s market, it’s not uncommon for homeowners to shop around for better insurance deals as a way to save money. If you’re thinking of switching insurance companies, be prepared for the new insurer to request a building report. Insurance companies use these reports to assess the condition of the property they are considering covering. This helps them understand any potential risks and allows them to offer you a competitive quote that accurately reflects the property’s condition. Having a detailed, recent building report can make the process of switching insurers smoother and may even help you secure a better rate.

How Red LBP Can Help

These scenarios highlight how important building reports can be, not just during the buying process, but throughout the life of your insurance policy. At Red LBP, we’ve stepped in to assist clients in these situations many times, even though the need for such reports might not be common knowledge. Whether you’re buying a new home, adjusting your current policy, or considering switching insurers, having a thorough building report can be invaluable.

In conclusion, while building reports are often thought of as tools for buyers and sellers, their role in securing and maintaining insurance should not be underestimated. Being proactive and obtaining a detailed report when needed can save you time, money, and stress down the line. At Red LBP, we’re here to help you navigate these requirements and ensure that you’re fully prepared, no matter what your insurance needs may be.

 

I'm Not Buying or Selling a Home – Is a Building Report Still Useful to Me?

In a word – absolutely! While building reports are commonly associated with the buying or selling of a property, there are several other instances where having one can be incredibly useful, even if you’re not in the market to buy or sell. Let’s explore a few scenarios where a building report might be just what you need.

1. For Insurance Purposes

One of the key reasons to consider getting a building report, even if you’re not buying or selling, is for insurance purposes. Your insurer may request a building report if you’re looking to make changes to your policy, such as adjusting the sum insured or adding additional coverage. For example, if you’ve recently renovated your home, an updated building report can be a valuable tool. It provides a clear, detailed picture of the current state of your property, which might reveal that your home is now at a lower risk level. This could lead to more competitive insurance premiums, potentially saving you money in the long run.

Additionally, if you’re shopping around for a new insurance provider, having a recent building report on hand can streamline the process. Insurers often want to know the exact condition of a property before offering a quote, especially if the property is in a coastal area or has had an EQC (Earthquake Commission) claim in the past. A building report ensures that you have all the necessary information ready, helping you secure the best possible coverage.

2. Planning Renovations or Improvements

Another excellent reason to commission a building report is if you’re planning to renovate or make improvements to your home. Building companies often request an independent building report before they provide a quote for renovation work. The reason is simple: a detailed report can reveal the true scope of the work required, including any underlying issues that might not be immediately obvious. This helps both you and the builder avoid surprises later on, such as unexpected costs or delays due to unforeseen problems.

By having a building report, you can also address any maintenance issues at the same time as your renovation, potentially saving money by combining work. Additionally, a detailed report allows the builder to provide a more accurate and comprehensive quote, reducing the likelihood of provisional cost (PC) sums for unknown expenses or surprise variation bills. In short, a building report helps ensure that your renovation project goes as smoothly and cost-effectively as possible.

3. Home Maintenance Guidance

New Zealand is known for its DIY culture, but not everyone is fully aware of what’s required to maintain their home properly. This is where a building report can be incredibly helpful. A thorough report doesn’t just highlight current issues; it also provides detailed guidance on what maintenance needs to be done, how often, and the best ways to keep your home in top condition.

Regular maintenance is crucial for preserving the value of your property and preventing minor issues from turning into major problems. A building report can serve as a valuable guide, walking you through each aspect of your home and outlining the steps needed to ensure it remains in excellent shape.

Conclusion

Even if you’re not buying or selling a home, a building report can offer significant value. Whether it’s for insurance purposes, planning renovations, or simply staying on top of home maintenance, a detailed report provides you with the information and peace of mind you need. At the end of the day, investing in a building report is an investment in the long-term health and value of your home.