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Insurance Replacement Cost Appraisals In British Columbia
Insurance Replacement Cost Appraisals in British Columbia.
Total Insurable Value for Strata and Commercial Properties
An insurance replacement cost appraisal estimates the cost to rebuild a building, on the valuation date, using current construction pricing and typical rebuilding assumptions. For strata corporations in British Columbia, property insurance is required on common property, common assets, buildings shown on the strata plan, and certain original fixtures as described in the Strata Property Act. Many councils use an independent replacement cost appraisal to support coverage decisions and reduce underinsurance risk.
What this valuation is, and what it is not
Replacement cost for insurance is not market value.
Market value is driven by buyer and seller behaviour. Replacement cost is driven by construction costs, demolition, professional fees, code-driven upgrades, site constraints, and rebuilding conditions.
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Why strata corporations commission insurance valuations
Strata corporations must obtain and maintain property insurance as required by the Strata Property Act, and the Province’s strata guidance summarizes these obligations.
A current replacement cost appraisal helps councils and managers:
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Set coverage amounts using defensible inputs
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Reduce the risk of underinsurance when construction costs rise
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Improve communication with brokers and insurers
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Support more informed budgeting for premiums and deductibles
What an insurance replacement cost appraisal typically includes
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Building description and relevant construction characteristics
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Rebuild cost estimate basis and cost drivers
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Allowances that may apply depending on assignment scope, such as demolition and debris removal, professional fees, and code-related cost impacts
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Assumptions and limiting conditions, including what is excluded and what is treated as client-provided information
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A clearly stated conclusion that can be used in broker and insurer discussions
How the Strata Property Act connects to insurance decisions
Section 149 of the Strata Property Act describes what the strata corporation must insure, including common property, common assets, and buildings shown on the strata plan.
Provincial guidance reiterates that all strata corporations must obtain property and liability insurance as required by the Act.
Our approach
We focus on clarity, defensibility, and practical use.
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We document the building features that materially affect rebuild cost.
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We explain major cost drivers in plain language so councils can understand what moves the number.
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We clearly state assumptions so your broker, insurer, and ownership know what the estimate does and does not cover.
What we need from you
If available:
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Building plans, specifications, and recent renovation records
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Current insurance documents and prior insurance appraisal, if any
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Site information that affects rebuild, like access limitations or unusual servicing
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Any major code or scope constraints known to the strata
If documentation is limited, we proceed with site review plus reasonable assumptions and we clearly disclose uncertainty.
Service area
We complete insurance replacement cost appraisals across Vancouver Island and the Sunshine Coast, from Greater Victoria to Port Hardy including Courtenay, Comox, Campbell River, Nanaimo, Port Alberni, and surrounding communities.
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If your last insurance valuation is older, or your premiums and deductibles have shifted sharply, contact us for a scope discussion. We will confirm building type, intended use, and deliverable format for your broker and council package.
FAQ
Is an insurance replacement cost appraisal required by law in BC?
The Strata Property Act requires strata corporations to obtain and maintain property insurance on specified items. It does not say you must use a particular method to set the amount, but many strata corporations use an independent appraisal to support adequate coverage decisions.
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What does “total insurable value” mean?
It is the insured rebuild cost basis used for coverage decisions. It is different from market value because it is rooted in rebuilding cost drivers.
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Does replacement cost include land value?
No. Replacement cost for insurance is about the building and insurable improvements, not land.
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How often should we update a replacement cost appraisal?
There is no single rule that fits every property. Update decisions usually depend on how quickly construction costs change, how complex the building is, and whether major upgrades were completed.
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Can you coordinate timing with our depreciation report?
Yes. Many clients align them because both require site review and good building documentation, but the purpose and methods are different.
