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The value of a building to be insured is the reconstruction value. This is often confused with an economic value or a WOZ value. When taking out insurance, the purchase value, the historical cost/building cost or the current value are used, for example.
As a result, the risk of underinsurance is very high in all these cases. A fixed valuation rules this out. We look at what the current construction costs of the building are.
The insured amounts are often indexed annually. This can create the risk that after a number of years the reinstatement value deviates very much from the actual building costs. A standard indexation uses a percentage that can often deviate from the actual increase in value of your building. This can lead to over- or underinsurance.
A building valuation can often be combined with a condition survey so that you know the current maintenance condition of the building.
For more information on condition measurement Read more.
The danger of overinsurance is that you pay too much premium while the insurance does not compensate more than the actual damage.
Underinsurance can lead to problems with the payment of the claim. For example: The De Vries family has suffered a loss of €15,000. The property is insured for €350,000, but it should have been €500,000. Because only 70% of the reconstruction value is insured, the De Vries family only receives 70% of the damage, in this case €10,500. This could have been prevented by means of a fixed valuation on the basis of Article 7:960 of the Civil Code.
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Article 7:960 BW

The insured shall not receive any payment under the insurance which would put him in a clearly more advantageous position. The preceding sentence shall not apply in the event of a prior assessment of the value of an item of property pursuant to a decision commissioned from an expert or pursuant to a decision of the parties in accordance with the advice of an expert.