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THE
PROMPT
Newsletter of the Canadian Association of Recycling Industries
Volume 5, No.2, February 2013
INSURANCE TIPS
Building Valuations – What You Need to Know
A property’s value can differ depending on the purpose of the valuation. Valuations will vary depending on whether you are financing or selling the building, estimating its current replacement cost or actual cash value for insurance purposes, or valuing its historical cost for financial reporting purposes.
Appraisals are a common method of determining building values. The type of appraisal conducted is determined by the purpose of the valuation. If the building is being sold or financed, a market value appraisal is conducted to determine its fair market price. If the valuation is for insurance purposes, an insurance replacement cost appraisal is conducted.
For insurance replacement cost appraisals, knowing the details of your policy is essential because the valuation criteria should follow the coverage offered by your policy. Using the policy to set appraisal criteria means the appraiser can correctly value your property and make sure you are properly protected. It will also ensure there are no discrepancies down the road.
Some policies include coverage for below grade foundations, basement excavation, underground plumbing, piping and conduits, architectural fees and building code, by-law and ordinance compliance costs.
Your valuation can also be affected by construction trends. Prices in the construction industry have caused the cost per square foot to soar in recent years. Supply and demand affects costs, which has a direct impact on a building’s valuation:
- Labour costs are rising exponentially due to a shortage of skilled trades in Canada
- Material costs have far exceeded inflation rates over recent years
- China’s growing economy has affected steel prices
- Rising oil prices influenced manufacturing and transportation costs
- Natural disasters led to increased costs for material
- Regional demand results in construction spikes, such as with Alberta’s booming oil industry and the Olympic games in British Columbia
- Demolition and debris removal costs are increasing
- Tipping fees have gone up in an attempt to divert materials from landfills and environmental testing is required to dump even inert materials on non-landfill sites
CARI EVENTS
CARI’s 72nd Annual Convention
June 20–22, 2013
at the Marriott Harbourfront Hotel
in Halifax, Nova Scotia
www.destinationhalifax.com/CARI_ACIR
CARI’s National Golf Tournament
August 22, 2013
at Glen Abbey Golf Course
in Oakville, ON
http://glenabbey.clublink.ca
CARI’s 16th Annual Consumers’ Night
October 28, 2013
at the Hyatt Regency Hotel
in Toronto
For information on CARI events contact Donna Turner at (905) 426-9313.
OTHER UPCOMING EVENTS
February 13–15 Moscow, Russia
9th International Forum
Ferrous and Non-ferrous Scrap Metals
Rusmet
http://lom.rusmet.ru/about.php
March 5–7 Dubai, UAE
Metals Recycling Conference Middle East
Recycling Today
www.metalsrecyclingme.com
March 13–15 Brussels, Belgium
13th International Automobile Recycling Congress
ICM
www.icm.ch
March 19–20 New Orleans, LA
Plastics Recycling Conference
Resource Recycling
www.plasticsrecycling.com
April 9–13 Orlando, FL
ISRI Annual Convention & Expo
ISRI
www.isri.org
May 26–29 Shanghai, China
2013 World Recycling Convention & Exhibition
BIR
www.bir.org/conventionwebsite/shanghai2013/home
Click the image above or visit this link for more information.
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