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Wednesday, 5 December 1973
Page: 2442

Senator MCAULIFFE (QUEENSLAND) - My question is addressed to the Minister representing the Minister for Housing and Construction. In view of the rapid escalation of housing prices, has an overall review of defence Service homes property values been carried out so as to ensure that insurance is sufficient to cover the replacement cost of the houses? Does the Minister agree that deduction allowances for depreciation in the present situation of escalating values is a sure way of ensuring that properties are undervalued rather than correctly valued? Will the Minister take steps to advise all defence Service home owners and, for that matter, all home owners that their properties may now be undervalued for insurance purposes? Will he ensure that his Department keeps this matter under continuous review?

Senator CAVANAGH - A number of complex issues in relation to this matter are currently being examined by the Department of Housing and Construction. Therefore, until those issues are considered I cannot give a complete reply. On the question of defence Service homes, the Department supplies a booklet to those home owners to keep them advised. They are asked to look at their insurance to see whether it is adequate to cover the value of their property. Often, through oversight or neglect, it is found that properties are underinsured with a resultant loss at the time of any damage. I have found that there is a tendency on the part of insurance companies, when renewing insurance, to advise of the possibility of undervaluation. Among the complexities is the tendency to insure on the value of the property against those risks which may frequently occur to a construction, but the value of the property takes in land. The insurance is taken out on the whole value. The risk to land is very slight and it should be a lesser insurance rate. All these problems are being considered. I shall take the matter up with the Minister for Housing and Construction and get him to give a written reply.

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