- Clients relying on independent assessment to set their declared values need to have confidence that, in the event of a loss, these assessed figures are accurate, defendable and can stand up to insurance market scrutiny
- While property valuers and quantity surveyors have a role to play in fixed asset management and new construction costing, their limited knowledge of insurance policy terms and how insurers view property risks, could leave owners exposed
- Insurers now expect higher standards from policy holders in terms of information on the risk provided prior to placement, including how declared values have been arrived at
- Insurers are also more carefully reviewing values after an insured loss, which not only requires owners to be open on how the insured values were arrived at, but also requires them to provide supporting detail on the assets impacted
- An independent advisor, specialising in reinstatement cost assessments for insurance, offers clients the comfort that, not only have they got the correct declared values, but that they will have the supporting information to respond to insurers quickly and easily during placement, and to speed up claim settlement in the event of a loss.
While there is a role for property consultants, contractors and quantity surveyors in the management or development of a policyholder’s asset portfolio, this doesn’t always equate to the correct expertise to arrive at appropriate declared values for property damage insurance policies.
If the assumptions adopted by a valuer do not match to what is expected by the various stakeholders, or what is stated within the insurance policy, the insured can end up exposed to underinsurance, or they could pay excess premiums.
This issue is of particular concern when figures are arrived at through computer modelling or by indexing up historic costs.
When choosing an advisor, best practice is to review their insurance track record, the experience of the individual team members, their independence in providing the advice and their ability to apply the correct approach to the reinstatement cost assessment of the assets.