When Is A Valuation Not A Valuation? Understanding The World of Insurance Valuations Dave Clare BSc (Hons), MCIOB, C.Build.E, Cert CII Divisional Operations Manager – Surveying Services
Underinsurance – Facts & Figures 87% of £374,000 average amount buildings valued in 2015 were underinsured 39% average extent of underinsurance £8m? 9 years Premium lost of surveys and no improvement
What effect does this have on a Claim? This cost the insured £440,000 Underinsurance impact Sum insured £11.805M VAR £14M X loss £2.78M = £2.34M
This cost the insured £320,000 Current Sum Insured £510,000 Actual Value at Risk following a fire £830,000 Underinsured by £320,000 (39%)
Do your clients say this...? “I wouldn't replace the “My bank equipment if it valued it” “Isn't market value was damaged” the same as reinstatement value?” “It wont happen to “A lower sum me" “I’ll recover insured saves quickly” me premium” ...therein lies the problem!
Types of Valuations Out There.... Market Valuation Mortgage/Bank Valuation Tax Valuation Probate Valuation Online Valuation Matrimonial Valuation Expert Witness Valuation Retrospective Valuation AND Insurance Valuation / Reinstatement Valuation / Reinstement Cost Assessment (RCA)
Market Value v Insurance Valuation Location Market Value Reinstatement Value Nottingham £730,000 £620,000 London £1.2m £670,000 Scotland £510,000 £590,000
Who wins in this scenario? Current Sum Insured £2,000,000 Actual Value at Risk following an insurance valuation £4,500,000 Underinsured by approximately £2,500,000 (125%)
Things to Consider – Material costs/ availability Buildings Building height and basement Demolition Electricity substation Landlord’s fixtures and fittings Building regulations Asbestos removal Disability Discrimination Act Listed Status Architectural detail Parking Out buildings Labour availability Water treatment Surveyor fees Shape of building Site location
Site Location
Listed Buildings – Special Features
Eco Friendly Features Outbuildings
An external inspection is not enough...
Expect the unexpected!
Underwriting Features
I f you’ve not been on TV, you’re not coming in...”
Tenants Improvements / Contents
The Insurance Act 2015 CUSTOMER KNOWLEDGE What MUST be actively disclosed NOT required to be disclosed Information held by the insurer and A fair presentation of the risk Knowledge of senior requires clear and accessible accessible to the management disclosure, without material underwriter relevant misrepresentation, of: to the risk Every material circumstance which the insured knows/ought to know: What an insurer Or, failing that, Knowledge of the writing this type of insurance team, Sufficient information to put a risk would prudent insurer on notice that it including brokers reasonably be needs to make further enquiries to expected to know reveal those material circumstances. Common knowledge Information reasonably revealed by a reasonable search FAIR PRESENTATION IN A NUTSHELL
Top 10 Things to Remember 1. Market value Vs Reinstatement value 2. Site Restriction 3. Internal Features 4. Material/Labour Supply 5. Special Features/ Interests 6. Site Contamination 7. Extent of the Risk 8. Modern Technologies 9. Statutory Regulations 10. The Insurance Act – Don't Guess
Where To Go For Help... Google Warning! BCIS Insurer QuestGates
BIBA Valuation Facility Provides Building Valuations Machinery/Plant and Contents Valuations Business Interruption surveys
Any T: 0121 794 3150 M: 07739 879 245 E: alistair.steward@questgates.co.uk uestions? W: www.questgates.co.uk T: 01204 869 844 M: 07734 708 430 E: dave.clare@questgates.co.uk W: www.questgates.co.uk QuestGates. Passion. Partnership. Progress. Passion. Partnership. Progress. QuestGates.
Recommend
More recommend
