Property Insurance Appraisal Pilots: What They Are and How They Help

When you’re managing property insurance for complex public entities like a state or risk pool, committing to a full-scale appraisal project can seem like a large leap of faith. For these multi-stage, multi-year operations, you need the assurance your appraisal partner is the right one for your organization with a process you can trust. That’s where a property insurance appraisal pilot comes in.

An appraisal pilot is a small-scale model of your full initiative. It’s designed to help you evaluate the valuation process, vet potential providers, and get a clearer picture of how your property data and valuation reporting will support your organization’s risk management goals — all without the commitment to risk of a larger project. Basically, it’s a sample of what you can expect to experience during the long haul.

The Benefits of Running an Appraisal Pilot

There are several benefits to choosing an insurance appraisal pilot before agreeing to full appraisals. By starting with a smaller scope, you can:

Test the waters and reduce risk before committing to a long-term or systemwide effort
Build internal buy-in for a larger project with tangible results and clear examples of deliverables
Validate a vendor’s capabilities, workflows, and reporting quality
Justify your budget for future expansion with concrete data in-hand

Pilots offer peace of mind, because they let your team verify the process and the partnership in a low-risk way before scaling up.

Common Reasons Organizations Implement Appraisal Pilots

Organizations choose to run appraisal pilot projects for many reasons, including:

Testing a new vendor to ensure they’re the right fit and can deliver what’s needed. (It’s also a great way to iron out communication, data sharing, and reporting processes before committing to a larger engagement.)
Reassessing high-value or complex properties, especially those that may have been under- or over-valued in the past
Preparing for a broader risk pool or statewide effort, where data consistency and process reliability are critical
Validating current property values ahead of insurance renewals, especially in a shifting insurance market

What Does an Appraisal Pilot Typically Include

While each pilot can be tailored to your organization’s needs, most involve:

A defined number and type of properties, such as a mix of facilities or high-value locations
A clear scope of data collection, which may include COPE details, CAT modeling data, property photographs, and updated valuations
A set of deliverables, such as valuation reports, statements of insurable value, and even access to software tools that help manage and update your property data

By pinning this down before the full project, you can make any changes you need to the process, add additional data points for collection, verify data quality, enhance communications as needed, and more.

How to Make the Most of Your Pilot

A successful insurance appraisal pilot project doesn’t happen by accident. To get the most value from your initiative, consider the following tips:

Define your goals and success criteria up front. Are you focused on data quality? Ease of working with the vendor? Report formats? Clarify what success looks like for your specific organization so you’ll know what to evaluate it against when complete.
Engage internal stakeholders early, especially those who will be reviewing reports, overseeing budgeting, or using appraisal data in their day-to-day work. What do they need for this project to be successful? What are their expectations? And what is their availability to support both this project and a larger project down the road? Early communication can be a key to success.
Choose representative properties that reflect the diversity and complexity of your larger portfolio. If you have a lot of historical properties, water treatment plants or stadiums in your property assets, it’s important to include at least one of each in your pilot. This ensures your results will be meaningful and scalable.
Thoroughly document your findings. These lessons learned will help serve as a roadmap of what to do (and what not to do!) for any larger projects. You can refer to these details during the larger project, and to compare for any future pilots, as a benchmark.
Take the time to analyze the pilot’s performance. Compare your pilot’s results to your success criteria. Check where the project succeeded and note any points where it may have fallen short. Look for red flags in your data, like missing square footages or inconsistencies for similar building types. Verify values to ensure accuracy, the building blocks for your SOV. Pinpoint any areas where you would choose to do something differently moving forward. Assess whether these changes can be successfully implemented by the pilot vendor, or whether you should pilot with a different vendor and compare results.

The information you don’t receive from a pilot project can sometimes be as valuable as the information you do. By analyzing the project’s success, you’ll gain confidence in your ultimate choice of appraisal vendor.

Helping Your Pilot Project Take Flight

If you’re ready to build a partnership for a large appraisal project and want a low-risk start, Centurisk can help. We’ve implemented successful insurance appraisal pilot projects for many risk pools and states, coordinating the data collection and communication that gives organizations like yours greater confidence in their property values. Contact us today to design a tailored pilot that meets your organization’s specific needs.