Insurance Replacement Valuation

Category: Uncategorised
Published: Friday, 04 September 2015 05:51
Written by Super User
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Insurance replacement valuations, unlike current market valuations determine the replacement value of your property in the case of an event/loss.

Property insurance is based on the concept of Indemnity Value defined as “The cost necessary to replace, repair and or rebuild the asset insured to a condition and extent substantially equal to but not better or more extensive than its condition and extent at the time that the damage occurred, taking into consideration the age, condition and remaining useful life of the asset.”

The insurer will, at the time of the claim, assess if you are adequately insured for the replacement costs/losses arsing from the event. This is generally known as the Co-Insurance test.

Co-insurance clauses in the policy provide that, if at the time of the loss the value of the property insured exceeds the amount of cover, the insured is considered to be self-insuring for the difference in value and therefore bears a rateable proportion of any loss (including a partial loss).

In effect, this means that the insurance companies will only payout a proportion of the claim if they find that you are underinsured.

Accord Appraisals will provide an accurate Insurance replacement valuation, ensuring that you are adequately insured thereby avoiding the risk of underinsurance and co-insurance clause triggering should a loss event occur, or conversely, unnecessary over insurance cost.