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In the event of a loss, property insurance coverage often proves to be inadequate. Should such a loss occur, property owners would not receive sufficient coverage to replace the building or a significant portion thereof. And, property managers or board of managers that approve the insurance premiums, may be at risk. Construction costs often outpace those provided in quick look-up tables so often used by insurance brokers in determining premiums.
Using our up-to-date cost files, IVI prepares Insurable Value Studies that range from a desktop review to a full site visit. Our studies address the following issues often neglected by insurers.
- Does the insurance cover building ordinance or the increased cost of construction?
- Does the coverage’s replacement cost consider the building’s existing amenities?
- Does the coverage omit diminution of value resulting from physical depreciation or functional obsolescence?
- Are demolition and waste transport costs included?
Keep in mind that if a building is damaged beyond a 50% to 70% threshold, local building authorities may require the entire building, not just the damaged portion to be re-built to code. This could have a significant impact on buildings with inadequate electrical distribution systems
that lack fire sprinklers, and that are without up-to-code head and smoke detectors and alarm systems.
For a reasonable fee, ownership or a board of managers can have calculations independently prepared to determine a building’s full replacement cost.
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