|
Insurance Appraisals- Do I need one?
The insurance industry today offers a wide range of policies to condominium associations. Some policies give guaranteed replacement cost, others offer enhanced replacement cost and still other policies give you replacement coverage without the enhanced or guaranteed features. You should understand what choices your insurance company offers.
Buying correct insurance will always mean verifying you carry adequate limits on the building. One way to do this is with an insurance appraisal. You can hire insurance appraisers to visit your site, compile a report and develop a replacement cost. The appraiser's report will have in-depth photos, square footage information, construction detail and a mathematical calculation of what the insurance industry uses for replacement cost. If the units have substantial improvements this will be reflected in the appraisal. Some customers prefer to rely on their insurance company to survey the site as part of their normal inspection. This is not an ideal solution. Insurance companies do not always release their building valuations, and if they do it's usually to increase your building limit and not decrease if you are over-insured. You may also find that your insurance company doesn't do any appraisal and relies on you to provide what you want for a building limit.
When the appraisal is complete you should compare the results to your policy. First correct the building limit if it's inadequate. Then determine what valuation clause you have on your policy and be sure it matches your appraisal. If you have replacement cost coverage you must carry replacement cost values, if you have actual cash value coverage you can carry a depreciated value.
The insurance appraisal may be the best way to justify what your building will cost to reconstruct if you do have a claim. If the claim is substantial this may be your only evidence.
|
