OneBeacon and Duff & Phelps: Partnering to Provide Insurance Appraisals
Adequate values are a crucial element in any well-constructed property insurance program - yet, too often, property policies are renewed “as is” or with only minor adjustments to values. Dramatic construction cost changes (both positive and negative) during recent years have left insureds confused as to the correct value adjustments, leaving many organizations no longer adequately insured. One industry study estimates that more than 70% of properties in the United States are at least 40% underinsured. Other studies suggest the problem is even greater.
Inflated insurable property values can cause an organization to pay excessive insurance premiums, while having inadequate insurance can be disastrous if a loss occurs. A structured property insurance appraisal program provides the following benefits:
Determining the adequacy of property insurance coverage (completeness of property listing and accuracy of property values)
Improved marketability to underwriters
A basis for the equitable allocation of premiums
No surprises at the time of loss
The modern-day risk manager knows only too well that change is constant. Updating real and personal property values each year used to be as simple as applying the inflationary factor provided by your underwriter or broker. Now a risk manager needs to consider many questions and issues, including:
Have we built or demolished properties this year?
Have there been changes in facility occupancies or major additions to buildings?
Are we keeping up with the day-to-day turnover of assets, especially the retirements, within our facilities?
Are we using the correct cost trend factor to adjust real and personal property values from one year to the next?
What is the value basis of our assets (replacement cost, book value, fair market value), and is it appropriate for insurance?
Has technological change affected the replacement cost of our assets?
To meet these challenges, Duff & Phelps provides building insurance appraisals and inspections that include:
- On-site inspection and appraisal of buildings, resulting in:
Capture of COPE data, both primary and secondary
Accurate determination of square footage, building shape and perimeter
Identification of various components of construction (structure, walls, roof)
Appraise major service systems (electrical, plumbing, HVAC, security)
Capture of unique/historic building features and site-specific factors
Observation of quality of construction
Accurate locational and descriptive details (GPS, accurate address)
Additional services provided by Duff & Phelps include annual updating/trending of values and web-based appraisal reports.
We look forward to working with OneBeacon’s valued clients to determine accurate replacement costs for your valuable assets. We commit to working with OneBeacon representatives and your organization to establish an effective and economical plan to meet your specific valuation needs.