Getting the right property appraisal for your building can determine the insurance you need to purchase for your long term strategy.
Documented professional asset appraisals
How can a busy executive accurately track ongoing fluctuating changes in bylaws, labour, and materials costs so that they arrive at the correct limit of insurance?
Sometimes there’s some guesswork applied, which can result in being over or underinsured. Plus, once a loss has occurred, it’s now on you to provide all the details necessary to claim funds to rebuild or replace the lost or damaged property.
We never want our clients to be in this situation, which is why we recommend being proactive with documented professional asset appraisals of building and equipment to remove any margin of error and prevent you and your organization from buying too much or too little insurance coverage. Best of all, it will help reduce stress and expedite the speed at which you receive claim payments.
Appraisal methodologies
There are several methodologies to incorporate when determining the value of a property or building. Two common approaches are:
Cost Approach
This approach considers the land and building components separately and reaches a value conclusion by adding these estimates together to form an opinion. The total cost estimate is adjusted by deducting the accrued depreciation of the dwelling and the site improvements.
Direct Comparison Approach
A value is determined by analyzing completed sales, listings, or pending sales of properties similar to the subject property. Also used are estimates of market rent, expenses, land value, cost, depreciation, and other value parameters.
Determining replacement cost values
Since the replacement cost of a commercial building is not its market value or its assessed value, how do property owners determine the replacement cost of their buildings? An insurance appraisal may be the safest way to estimate the cost to repair or replace your property.
Factors to consider when determining a building’s value
- Direct and indirect costs
- The facility’s age
- Building code upgrades
- Site accessibility
- Unique or non-typical building characteristics
Important points when choosing a property insurance value
- Think reconstruction costs, not replacement costs.
Material and labour costs will increase from current market conditions. - Have your broker explain the difference between valuation and policy limits.
Reliance has several certified appraisers we’ve worked with for years to ensure the variables behind the limits of insurance our clients buy are documented and reflect current market conditions.
Avoid underinsurance scenarios as well as any shortfalls to rebuild if a total loss occurs.
You may need:
Bonds & Surety
Don't let a surety bond requirement hold you back from expanding your business.
Building Equipment & Stock
Your livelihood is dependent on the survival of your business. Protect it against any potential threat.
Crime
Commercial crime is on the rise, particularly as evolving technologies open up more opportunities for theft or fraud.
Earthquake Buydown
When the big one hits, we want to ensure you can repair or rebuild your commercial property.
The team at Reliance Insurance has been proactive in making sure we have adequate coverage for the risks our business engages in. They've done a great job protecting our company, property and assets and ultimately our shareholders.
— VP Sales & Marketing, Zurich Insurance
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