News & Announcements
Revision of the Insured Value of your Home
Prompted by our time-honored philosophy for transparency and objectivity towards clients with a view to affording them the best possible protection, we wish to inform you about an important matter concerning the insured value of your home.
As you may already know, construction costs have increased significantly over the past 2 years due to appreciations in the cost of construction materials. According to the Cyprus Statistical Service, the increase since November 2020 has been 33%, pushing construction costs to over €1500 per square meter.
- House 200 sq.m. - the insured value must be at least: 200X1500=€300,000
- Apartment 100 sq.m. - the insured value must be at least: 100X1500=€150,000
Source: Statistical Service Press Bulletin 18/10/22
Considering the fact that the basis of insurance as well as compensation for your home in the event of damage is the Reinstatement Value, i.e., the cost of rebuilding as if it were new, you realize that the above significantly affects your insurance cover. Therefore, it would be wise to revise the insured value of your property based on the current construction costs to avoid the risk of under-insurance. To illustrate this, we provide a simple example.
If the insured value of your house remains at €200,000, while the reinstatement value with today's costs is €300,000, then, in the event of total loss, the compensation amount (€200,000) will not be enough to fully restore your damage. Moreover, in case of partial damage, e.g., €75,000, then, based on the insurance condition of average, which is a standard clause of all property policies without exception, you will be compensated for an amount of only €50,000 and not €75,000 (200,000/300,000X75,000=50,000).
Therefore, we strongly recommend that you review the insured value of your house or apartment on the basis of today's realities. Afterall, we are sure you would want to fully protect your possibly most valuable asset for which you worked so hard for.
Please do not hesitate to contact us for any clarification or assistance you may need in relation to the above.
Emilios Z. Pyrishis