Property Valuation – Insurance Valuation

I was cleaning out some file drawers last week and found a document that I must have placed in the file when I first started in the insurance business, 30 years ago.It's from Millers Mutual Insurance Company. The paper describes the different ways that property can be valued. No author is listed, so I cannot give proper attribution. I am … [Read more...]

Green Insurance Coverage

I'm starting to ask property insurers to offer coverage to pay to replace a non-green building with a green building, after an insured loss.Most "main-line" insurers are not offering this yet.  They will, if enough people ask for it. … [Read more...]

Actual Cash Value vs Replacement Cost

Two ways most insurance policies value property...Replacement cost is the cost to buy the item lost new.  Its the cost to rebuild the building with current cost of materials and the current cost of labor.Actual cash value (ACV) is usually defined as replacement cost minus depreciation.  It also can be thought of as the market value of an item.The … [Read more...]

Update Your Replacement Costs

Marshall & Swift/Boeckh follows construction costs.  They provide detailed figures on how much it costs to build buildings.  They have been doing this a long time.If you built a building in 2005, the service says, on average, that the cost of construction has increase by 15% to 22%, depending on construction type and where the building is … [Read more...]

Actual Cash Value

In the realm of property insurance is the issue of valuation. How much is something worth, and how much will the insurance company pay for a covered loss to that property?Two primary insurance valuation methods - replacement cost and actual cash value.Replacement cost is the - wait for it - cost to replace an item new.Actual cash value is usually … [Read more...]