Check whether your commercial building is underinsured

Most owners find out at the worst possible time. The building is damaged, the assessor works out what a rebuild really costs, and the figure on the policy turns out to have been set years earlier and nudged along at each renewal since.

There are two separate ways that gap hurts, and they work differently. On a partial loss, a co-insurance clause lets the insurer scale the payout down in proportion to how far your sum insured sits below what the policy requires. On a total loss there is no scaling at all: you are paid your full sum insured, and every dollar between that figure and the real rebuild cost is yours to find. The full mechanics, the formula and published determinations where it has bitten are in The Co-Insurance Clause: What Every Building Owner Must Know.

If your building is a commercial strata unit, the first of those two probably does not reach you. None of the commercial strata wordings we place carries a co-insurance clause, so on those wordings nothing scales a strata claim down in proportion. Your own scheme may be insured elsewhere, so it is worth checking your policy, or asking us to. The gap still costs real money, it just does it the other way: the loss is paid in full up to the sum insured, and if that figure does not finish the rebuild the body corporate carries the shortfall and funds it by levy, which lands back on the lot owners. That is why this checker still asks. See commercial strata insurance for how the two levels work.

This checker gives you the first half of the answer in a minute: how likely it is that nobody has measured your number lately, and which of your own answers put you there. The second half is a real measurement, and that is a job for a valuer.

When it was last professionally valued. This is the single biggest driver, so it carries the most weight. A valuation is a measurement. Everything else on a renewal notice is an adjustment to a number somebody set once.

Here the law is worth being precise about, because it is widely misquoted. In Queensland a body corporate must insure common property for full replacement value and get an independent valuation at least every five years (Body Corporate and Community Management Act 1997). For an ordinary commercial building held in your own name or a company, there is no equivalent rule. Nobody makes you check. That is exactly why so many of these numbers are old.

Whether the sum insured has been measured or just nudged. A figure that rises a little each year looks like it is keeping up. It is not the same thing as a figure somebody measured. Indexation adjusts what was already there, including the error.

How long you have held it. Time is what turns a small gap into a large one, because rebuild costs move and an unmeasured number does not. Non-residential building construction prices across Australia rose 4.4% in the year to the June quarter 2026 (Australian Bureau of Statistics). Compound a few years of that against a figure nobody has revisited and the arithmetic does the damage on its own.

What kind of building it is. Industrial and warehouse buildings show the widest measured gaps, so the checker weights them accordingly.

Whether the building has changed. A new mezzanine, an extension, a solar array, a change of use. Each one moves the rebuild cost, and none of them move the sum insured unless somebody tells the insurer.

How far out are these numbers in practice? Only about one in ten businesses think they are underinsured (Insurance Council of Australia research, 2015; Vero SME Insurance Index, 2025). When quantity surveyors actually measure it, buildings come up around 24% short on average, and 31% short for industrial property (MCG Quantity Surveyors, 2024). The gap between those two figures is the whole problem: this is not something owners are ignoring, it is something they cannot see. For how often a building should be revalued, and what a rebuild figure has to include, see Underinsurance: The Biggest Risk to Commercial Building Owners and Desktop Building Replacement Valuation.

We could have built a calculator that prints a rebuild cost. We decided not to, for a reason worth telling you plainly.

A published AFCA determination held that an insurer's own online rebuild calculator was an estimate, not advice, and when the sum insured it produced fell short the shortfall was the policyholder's problem. That is the whole case against putting a number in front of you here. A figure you can rely on has to come from a desktop building replacement valuation, a registered valuer's desktop assessment of the rebuild cost, done without a site visit, not a number inferred from five buttons.

So this page gives you two honest things instead. A read on how likely it is that nobody has checked, and a way to get it checked properly. What it does not give you is false comfort, which is the one output that would genuinely cost you money. The arithmetic half of the question sits on how far building costs have risen since the year your sum insured was last set, which gives you a published percentage rather than a figure for your building.

Two other limits, stated up front. The result is based only on what you tell us, so it is as good as your answers and no better. And a green result is not a certificate: it means your answers do not show the usual warning signs, not that your number has been verified.

Here is the plan, in order.

1. You give us your name, a number and the suburb the building is in. That is the whole form.
2. A broker who works on commercial buildings every day rings you and asks about the building: construction, floor area, fit-out, anything that changes what a rebuild would really cost.
3. We commission the desktop valuation. It is usually back within 1 to 2 hours of the call, in business hours: a registered valuer's desktop assessment, commissioned for our purposes as your broker, to inform the advice we give you.
4. You go through the result with us in plain language and hear what it means for your cover, including where your current policy would land if you claimed tomorrow.
5. If there is a gap, we close it at a pace you can manage, with real options at each step, including where a higher excess keeps full cover affordable.

If the valuation comes back higher than your current sum insured, which it often does, nobody hands you a take-it-or-leave-it bill. And because we commission a desktop valuation at new business and again at every renewal, keeping the number current stops being something you have to remember.