How Often Should You Update Your Insurance Replacement Valuation?

How Often Should You Update Your Insurance Valuation? Many South African property owners take out building insurance once — and then forget about it. Years later, they assume they’re still covered… until they submit a claim and realise they’re underinsured.

So how often should you update your insurance replacement valuation?

The short answer: more often than you think.

Why Insurance Valuations Go Out of Date

The cost to rebuild your home or building doesn’t stay the same. Construction prices are constantly changing due to:

Rising material and labour costs
Exchange rate fluctuations
Load shedding and fuel hikes
New building codes and energy requirements
Environmental risk factors in your area

All of these affect how much it would cost to reinstate your property after a total loss — and they change every year.

General Guideline – Update Your Insurance Replacement Valuation

For most property types, a good rule of thumb is:

Residential homes: Every 3–5 years
Commercial buildings: Every 1–3 years
Sectional title schemes: Annually (as required by law)

You should also get a new valuation immediately after:

Building renovations or improvements
Adding new structures like garages or flatlets
Changes to the use of the building
Shifts in the construction market (which are common in South Africa)

What the Law Says for Sectional Title Schemes

Update Your Insurance Replacement Valuation -In terms of the Sectional Titles Schemes Management Act, trustees must ensure the building is insured for its full replacement value — and that value must be reviewed at least once a year.

This protects all owners and is often enforced by body corporates, managing agents, and insurers. A professional valuation certificate is usually required as proof.

Why Relying on Market Value or Municipal Rates Is a Problem

Your home’s market value might increase or decrease — but it has nothing to do with the cost to rebuild it.
The same goes for your municipal valuation — it’s used to calculate rates and taxes, not replacement costs.

Insuring for either of these figures puts you at risk. Your policy must reflect the actual reinstatement cost at current prices.

A Real Example – how often should you update your insurance replacement valuation?

A property owner in Wilderness had insured their home for R1.9 million based on the municipal value. After I conducted a formal replacement cost valuation, we discovered the rebuild cost was R2.95 million. They updated their cover, avoiding a near R1 million shortfall had something gone wrong.

What a Replacement Valuation Includes

As a professional valuer, I assess:

The condition and complexity of your structure
The current building cost rates per square metre
Site-specific factors (slope, access, materials)
Demolition, fees, and compliance costs
VAT and inflationary trends

This isn’t a guess — it’s a detailed calculation that gives you peace of mind and a clear document your insurer can work with.

What Happens If You Don’t Update It?

If your valuation is too old:

You risk underinsurance and reduced payouts
The insurer might apply the average clause, leaving you with a large financial gap
In the worst case, your claim could be partially or fully rejected
You may be paying premiums for cover that isn’t enough

Need an Insurance Replacement Valuation Update?

Insurance cover isn’t a “set and forget” product. It only protects you if it reflects the current cost of replacing what you’ve insured.

If you’re unsure when last your insurance valuation was done — or whether it’s still accurate — I can assist. My reports are accepted by major insurers and tailored to your specific property, not a generic formula.

Claire King 072324407

Also have a look at the following related articles:

Eight Common Mistakes Farmers Make When Valuing their Property

Agricultural Valuations for Estate Planning and Inheritance

Selling Your Agricultural Property? Start with a Registered Valuation

Agricultural Property Valuations in George – a complex challenge for Valuers

Interested in Farm Valuations? Check out more at the SAIV website