We’ve heard story after story of entities getting stuck with the bill after a catastrophe due to property values gone awry. These unfortunate instances expose how differences between an assumed property value and one attained on foot, by a trained professional aren’t always noticed until it’s far too late. How did it happen? It often is a result of a desktop or drive-by valuation.
What is a “desktop” or “drive-by” valuation?
“Desktop” or “drive-by” valuations are terms for valuations in which an appraiser uses speculation from a desk, perhaps using a service such as Google Earth, or by driving by each property to get a general idea of the building. It provides the user with information and can be useful for determining certain elements, but it can be problematic when it’s used as a complete substitution for a full valuation.
So why would someone choose this type of valuation?
At first, this technique can seem fiscally responsible. It can certainly be less expensive to establish values based on existing information and research done from your desk. And when access to a site is limited or you’re just filling in additional information like checking square footage or the nearest firehouse after onsite valuations have been done, in those instances, it can make a lot of sense.
So while a “desktop” or “drive-by” valuation can have some merit, a deeper understanding reveals that there really is no substitute for a comprehensive, onsite appraisal.
Case study: don’t judge a pump house by its cover
Did you see the two buildings pictured at the top of the post? Those pump houses may look very similar on the outside, but they are actually very different. They have different well depths (50 feet v. 300 feet) and contain variations in the pumps themselves. In fact, the one with the deeper well depth has almost twice the replacement cost of the other.
The desktop or drive-by approach would have never identified these differences. Incorrect assumptions could have set the client up for a worst-case scenario in the event of a loss. All because a full on-site valuation never took place.
On-site means greater on-target accuracy
As property valuation experts, we see the value in a comprehensive on-site appraisal. It’s the little details that add up to big potential losses if they’re not accurately inspected and documented. For accurate insurance coverage, there really is no substitute for a physical inspection.