The value of a VvE building or VvE complex to be insured is the reconstruction value. This is often confused with an economic value or a WOZ value. When taking out insurance, for example, the purchase value, historical cost/construction cost or current value are used.
As a result, the risk of underinsurance is very high in all these cases. A fixed valuation of the VvE building or VvE complex rules this out. We look at what the current construction costs are for the building.
Often the insured amounts are indexed annually. This can create the risk that after a number of years the reinstatement value will be very different from the actual construction costs. A standard indexation uses a percentage that can often differ from the actual increase in the value of your VvE building or VvE complex. This can result in over- or underinsurance.
Underinsurance
The term underinsurance actually covers it. Your insurance pays out too little because the insured value is lower than the current reinstatement value of the building. This could have been prevented by a fixed valuation based on article 7:960 BW.
Overinsurance
An often slightly less-exposed side of insurance is overinsurance.
The danger of this is that you pay too much premium while the insurance does not compensate more than the actual damage. You can prevent this too with a fixed valuation based on Article 7:960 of the Civil Code.
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.