In an ideal, magical land of property risk management, budgets would be limitless and there would be full, thorough, onsite physical inspections of every property in the insurance portfolio, anytime it was needed. Every necessary detail would be expertly verified and documented down to the last roof fastener. And 100% of your total replacement values would stay refreshed, shiny and true…
But folks in real-world property risk management know– especially in the age of COVID-19 with tightening budgets– that’s not quite the way things work.
So, instead, many organizations break down their property schedule into phases, grouping onsite appraisals by location or a range of past valuation levels. (For example, perhaps every property valued at $1 million and up would become a phase and anything $500,000 to $999,000 would be another. And so on.) These phases are then scheduled for valuation over a certain number of years. This offers a solid baseline insurable value for each property, and it all gets done over time.
But between valuations, how do you predict the way each value will trend year over year? And what do you do when having on-site property valuations are more difficult due to pandemic-related travel issues, closed properties and social distancing? This is where having a trusted building value estimator that trends forward can help.
Custom to Your Organization, Efficient Results
A robust tool like Centurisk’s AMP Valuation Estimator can be quickly customized for your organization to calculate new baseline values specifically tailored to your properties, when on-site valuations aren’t either fiscally or logistically possible. This cost-efficient, convenient solution should work in conjunction with scheduled on-site valuations to address 100% of your insurable value. A good building value estimator tool should consider data points like zip code, occupancy, ISO construction class and other elements to help determine a current baseline cost. In the case of the AMP Valuation Estimator, you can do this for one property or as a batch. Another benefit of a tool like this is it can be implemented smoothly, even while you’re in the process of other risk management information system implementations. This way you don’t lose momentum with your property program while other system improvements are being made.
At Centurisk, we’ve had customers in the past who’ve struggled to keep up with the true cost of construction for their properties and, in many cases, were undervaluing them. A property valuation estimator tool helps get these estimates back on track. (You can read about one customer case study related to this – the North Dakota Insurance Department– here.)
An effective valuation estimator should also let you refine your models as information such as the cost of construction and building materials shifts, or as maintenance levels change, so it will always keep your estimates current and relevant.
What Model Modifiers Should You Look for in a Building Value Estimator?
Following are some of the key modifiers we at Centurisk recommend for our AMP Valuation Estimator, to ensure the greatest trending accuracy, though other companies’ tools may vary:
- Valuation Resources: Direct costs, regional market analysis, producers price index, consumers price index, proprietary valuation resources
- Base Value Modifiers: Zip code, occupancy, ISO construction class, condition
- Optional Property Modifiers: Limited access site, LEED/green certification, lifeline facility, seismic/windstorm region, and more
Affordable, Convenient, and Keeps Your Property Program on Tracks
For those in-between-formal-valuation times, or when remote work makes on-site appraisals a challenge, a robust building value estimator can be the perfect tool to efficiently trend building values, secure more accurate total insurable values and ensure your properties aren’t overlooked and underinsured.
- To learn more about Centurisk’s own building value estimator tool, the AMP Valuation Estimator module, click here.
- To learn more about Centurisk property valuation services, click here.