Help
Legal Forms | Legal Documents | Tell-A-Friend | Legal Terms Dictionary | Today's News
Downloads Legal Topic Lawyer Directory Legal Links Free E-mail Bookstore Legal Discussion Forum Legal Jokes Bookmark Lawyerment

INSURANCE LAW - Property Insurance
Related Topics : Auto Insurance . Business Insurance . Disability Insurance . Health Insurance . Insurer's Bad Faith . Life Insurance Law . Property Insurance


Rebuilding Cost

Home Insurance

The following is a simple guide on how to arrive at the rebuilding cost and subsequently the sum insured on building for insurance purpose :

Length of property : 40 feet

Width of property : 20 feet

No. of floors : 2

Total built-up area of property : 40 x 20 x 2 = 1,600 sq. feet

Current rebuilding cost* say @ RM80 per sq. foot = 1,600 x 80 = RM128,000

(*Note that the rebuilding cost would depend on the finishing as well as the location of the property. A building contractor can easily provide a quotation. As a rule of a thumb, a figure between RM60 to RM150 per square foot can be used).

Base on the above rebuilding cost, you can roughly work out the sum insured for insurance purpose the following Basis of Insurance:

Indemnity Basis   Reinstatement Value Basis
Rebuilding cost 128,000 Rebuilding cost 128,000
less depreciation for wear & tear say 20% (25,600)   add inflation for insurance year say 5% 6,400
102,400   134,000
add inflation for insurance year say 5% 5,120 add inflation for max. reinstatement say 12 months @7% 9,408
107,520 143,808
rounded-up 108,000 rounded-up 145,000


You may increase the above figures sufficiently to include Removal of Debris and/or Professional Fees. The above figures are used to show the workings of the calculation only. Please refer to a professional valuer if you are in doubt.

Back To Previous Page

Last Updated : ©1999-2000
Lawyerment is a leading Malaysian legal site for consumer & small businesses. It provides general legal information to help people understand their legal rights in Malaysia, but it is not a substitute for personal legal advice from an attorney. You are welcome to view Lawyerment for your own personal, non-commercial purposes, AS IS, subject to our disclaimer & conditions of use & Privacy Policy. Lawyerment is a unit of Magnificent Communication. 1999-2000 - All rights reserved.
Comments ? Please send them to webmaster@lawyerment.com.my
Advertising Opportunities | Contact Us