Underinsurance Facts & Figures 87% of 374,000 average amount - - PowerPoint PPT Presentation
When Is A Valuation Not A Valuation? Understanding The World of Insurance Valuations Dave Clare BSc (Hons), MCIOB, C.Build.E, Cert CII Divisional Operations Manager Surveying Services Underinsurance Facts & Figures 87% of 374,000
Understanding The World of Insurance Valuations
Dave Clare BSc (Hons), MCIOB, C.Build.E, Cert CII Divisional Operations Manager – Surveying Services
buildings valued in 2015 were underinsured
Premium lost
improvement
average extent of underinsurance
average amount
Underinsurance impact
This cost the insured £440,000
This cost the insured £320,000
“Isn't market value the same as reinstatement value?” “I wouldn't replace the equipment if it was damaged” “I’ll recover quickly” “It wont happen to me" “A lower sum insured saves me premium”
“My bank valued it”
AND
Insurance Valuation / Reinstatement Valuation / Reinstement Cost Assessment (RCA)
Location Market Value Reinstatement Value Nottingham £730,000 £620,000 London £1.2m £670,000 Scotland £510,000 £590,000
Who wins in this scenario?
Things to Consider – Buildings
Building regulations Asbestos removal Disability Discrimination Act Listed Status Architectural detail Parking Out buildings Labour availability Water treatment Surveyor fees Shape of building Site location Material costs/ availability Building height and basement Demolition Electricity substation Landlord’s fixtures and fittings
FAIR PRESENTATION IN A NUTSHELL What MUST be actively disclosed NOT required to be disclosed Knowledge of senior management Knowledge of the insurance team, including brokers Information reasonably revealed by a reasonable search Information held by the insurer and accessible to the underwriter relevant to the risk What an insurer writing this type of risk would reasonably be expected to know Common knowledge
A fair presentation of the risk requires clear and accessible disclosure, without material misrepresentation, of: Every material circumstance which the insured knows/ought to know: Or, failing that, Sufficient information to put a prudent insurer on notice that it needs to make further enquiries to reveal those material circumstances.
1. Market value Vs Reinstatement value 2. Site Restriction 3. Internal Features 4. Material/Labour Supply 5. Special Features/ Interests 6. Site Contamination 7. Extent of the Risk 8. Modern Technologies 9. Statutory Regulations
BIBA Valuation Facility Provides
Building Valuations Machinery/Plant and Contents Valuations Business Interruption surveys
QuestGates.
T: 0121 794 3150 M: 07739 879 245 E: alistair.steward@questgates.co.uk W: www.questgates.co.uk T: 01204 869 844 M: 07734 708 430 E: dave.clare@questgates.co.uk W: www.questgates.co.uk