What’s it Worth
The U.S. property insurance market is facing one of the most difficult times in history from the increase in natural disasters and high inflation to labor shortages in the infrastructure sector to supply chain distress. And securing coverage for your nonprofit and human service clients is as challenging as ever, particularly due to valuation.
Today, many are experiencing higher claims costs following property losses and underinsurance concerns due to inaccurate property valuations. According to Risk Magazine, commercial property insurance rates have risen 18 quarters in a row, with policyholders seeing rate increases anywhere from 8 to 12% compared to previous years.
As a broker, you play a key role in helping your clients navigate these rising property valuations to secure the most accurate valuation in the market. Now more than ever, it’s important to carefully analyze and estimate a property’s total value to avoid coinsurance and other limits.
Why valuation matters
With the rising costs of property repair and replacement, supply chain issues, and a skilled labor shortage, an accurate property valuation is essential. Each year, when it’s time to renew property policies, your nonprofit and human service client needs to make sure a property’s coverage reflects the most current valuations.
An accurate property valuation ensures two things: 1.) the correct amount of insurance coverage to adequately cover any potential losses; and 2.) the right premium cost (vs. too high or too low) to cover that risk.
Know your value
There are a few ways to assign value to a property – market value (what your property is worth in the current real estate market), assessed value (an estimated value generated by the municipality where a property is located, which typically determines your local property taxes) and replacement value (an estimation of the current cost to replace or rebuild a property).
When it comes to navigating rising property valuations, advise your client to work with a skilled appraiser and review their assessment every three years due to fluctuating labor materials and costs. If appropriate, consider the input of a risk manager, contractor, accountant or real estate expert when making valuation decisions.
An evolving market
Property values are constantly changing due to many factors so finding the right insurance partner is key. From a catastrophic weather-related loss to a fire or flood, the costs to rebuild continue to rise. And as a result, so will premiums.
At Convelo, we know that when a property is insured to value, everyone benefits – the insured, the broker and the insurer. Our deep niche expertise provides you with the support and insights you need to deliver complex insurance programs for clients across the nonprofit and human service sectors.
Learn more about our capabilities and how we can help you grow your book of business with customized policies for your nonprofit and human service clients at a competitive price.