As summer looms, home owners have been warned to check their bushfire insurance policies.
Tony Freeman has a settlement now, but says that was only after seven months of battling his insurer to receive a higher pay-out. He lost that battle, receiving less than he believed he was entitled to.
The Sydney man's architect-designed NSW South Coast holiday home at Bendalong officially became his primary place of residence two weeks before it burnt down in the bushfires.
He believed his policy meant insurers would replace the building with the equivalent.
Mr Freeman, an architect, wanted to look closely at the building quote the insurance company relied on.
"Because I'd insured it at the top level of construction, I didn't trust they were going to quote it appropriately," Mr Freeman said. He engaged a quantity surveyor for an estimate, "based on the same documents the insurance company was using".
He said the insurance company's quote was "vastly below" the surveyor's estimate, but the insurer would not accept that estimate.
"It's shocking that you have a whole industry (of) basically independent cost consultants, and the insurance company said we don't acknowledge what they say or put in writing; we only accept a builder's quote."
Mr Freeman sought quotes from South Coast builders.
"The prices they were coming back with were very similar to my quantity surveyor," Mr Freeman said.
"They were much more - usually 30-40 per cent - than what the insurer's builder had quoted."
He said the amount quoted for architect fees was "a tenth of what they should have been".
Windows couldn't be bought off the shelf, and timber and recycled hardwood in his home were more expensive "because it has to be made individually".
"You could probably get the cheapest toilet for that, but that was not what I'd insured it for."
Rebuilding more cheaply meant cutting corners, "use cheap materials, or not supervise it properly. Is that what you want?"
Mr Freeman eventually settled for less than he wanted.
"I just wanted closure," he said. "It was a reasonable amount and I just didn't want the stress and strain to continue."
He said the settlement included a certain amount for the new Bushfire Attack Level (BAL) ratings.
He feared those whose homes were insured for a fixed amount would to meet stricter ratings.
Many did not realise the costs involved even before building began.
"The build might not start for a year and a half, and there are price increases," he said.
Campbell Fuller, Head of Communications and Media Relations at the Insurance Council of Australia (ICA) said anyone who disagreed with an assessment by their insurer could lodge a complaint and seek internal dispute resolution.
"If they remain unsatisfied with that dispute resolution, they can take their case to the free and independent Australian Financial Complaints Authority," Mr Fuller said.
"After natural disasters, it's common for the cost of building materials and building trades to increase. Some property owners may also be experiencing a requirement for their properties to be rebuilt to much higher building standards in bushfire zones and that may significantly add to the cost of rebuilding."
Australian Institute of Quantity Surveyors CEO Grant Warner said houses were under-insured because many owners did not understand costs.
"What they think it's worth and what it costs to rebuild if it's completely destroyed are completely different," he said.
"They wouldn't necessarily get the right information from their insurer either, because insurers generally don't have a lot of information as to what houses cost to rebuild because they vary from location to location.
"If you had a house in the middle of Sydney and the exact same house on the South Coast, it could cost twice as much to build on the South Coast, purely because of supply and demand, labour, materials and accessibility. Where you have a builder with no knowledge of the expenses in that location, it can cause problems.
"I don't know what's going to happen if the insurer accepts the quote by the builder and the builder subsequently finds out he actually can't build it for what he thought he could."
Mr Warner said insurers should be required to allow an independent construction professional to estimate costs.
"Builders will often exaggerate the costs as soon as they know it's an insurance claim," he said.
"I'm pretty sure insurers are aware of this which is why they're working ways around that. But if you have a quantity surveyor who is not involved in the building, there's no conflict of interest.
"Quantity surveyors have qualifications in construction and cost management and a number of years experience so they know the costs and additional things to look for."
Mass destruction meant high demand and higher costs.
"You could be paying 50 per cent more to rebuild the same house," Mr Warner said.
"The insured person may only get a proportion of what their insurance is. Insurers need to take into account some sort of mechanism to allow for an escalation in building costs in mass destruction events.
"If the insurers don't take this on board, then it becomes incumbent on government to make some sort of regulation around what has to be covered in a home building insurance policy."
It was important to educate owners via a "checklist at the front of a policy saying ... what's covered and what is excluded".
There were many considerations.
"They pay you for 12 months of rent but there's no way you can get a house designed, approved and built within 12 months," Mr Freeman said.
"The thing with insurance is you should be no worse off at the end of it."
Mr Freeman said online calculators varied.
"Some say they might have the highest level of construction at $1500 per square metre to build," he said.
"I'm building a lot of high-end houses in Sydney and some of their construction costs might by $8000 or $10,000 a square metre."
Insurers asked home owners how much they wanted to insure for, but "people have no idea what it costs to rebuild a house, then they're suddenly under-insured," he said.
"You've got to get council approval, you've got to get structure engineers, you might need an architect or a draft person, you need a bushfire consultant, a geotech consultant ... before you can even submit an application and they just don't cover that.
"It's the biggest investment most people make in their life," he said.
"If you have an event like this, it can just knock you out.
"That might be 10 years of savings you've lost because you can't build what was there before."
ICA and the Master Builders Association (MBA) announced on Friday, November 13, they would develop proposals to help strengthen homes and communities against natural disasters.
"The industry groups have heeded key findings from the Royal Commission into National Natural Disaster Arrangements and will host a series of roundtable discussions to create a pathway towards national policies that improve property resilience, building standards and land-use planning," a spokesperson said.
"The Building Stronger Homes Roundtable will enable builders and insurers to work together, harnessing industry insights from both insurance data and builders experience, to help map actions that can improve the resilience and insurability of existing and future Australian homes."
ICA CEO Andrew Hall said "whatever efforts we can take to reduce vulnerability and reduce the risk of loss must be a priority for industry and Australian governments".
MBA CEO Denita Wawn said the building and insurance sectors were committed to exploring practical and effective ways to deliver better building quality outcomes that enabled industry to deliver more resilient buildings and give consumers confidence.
"This includes keeping premiums at a sustainable and affordable level for consumers and the building and construction supply chain."