ABSTRACT
The problem of adequately covering by insurance the loss and damage caused to buildings by fire and other perils has been highlighted in recent years by the increasing rate of inflation.
There are a number of schemes available to the building owner wishing to insure his property against the usual risk. Traditionally the insured value must be sufficient to cover the actual cost of reinstating the building. This means that in addition to assessing the current value an estimate has also to be made of the increases likely to occur during the period of the policy and of rebuilding which, for a moderate size building, could amount to a total of 3 years. Obviously such an estimate is difficult to make with any degree of accuracy; if it is too low the insured may be penalized under the terms of the policy and if too high will result in the payment of unnecessary premiums.
