Insurance Appraisals

Don has 6 of 10 courses in the Chartered Insurance Professional program - CIP, and he has completed the CAIB designation (Canadian Accredited Insurance Broker) with honours academic standing in 2007, in addition to 15 years in the home / auto / commerical lines insurance industry on the front line, (as a sales rep and underwriter) but also as a supervisor and manager.

Accurate Replacement Cost Calculation:

Disagree with the amount of insurance your insurance broker or insurance agent / company is insisting you place on your home or business / commercial buildings?

Most likely your broker or agent went through a list of questions with you on the phone, about your home and then took that information, and entered it into an industry recognized replacement cost calculator, put out by a company called Marshall & Swift & Boechk. Marshall & Swift has been in the business of figuring out construction costs of materials & labor since 1932. They later purchased Boechk, a competitor, in the last 20 years. Marshall & Swift is now owned by Core Logic.

This calculator is used by appraisers as well. What is different then between a replacement cost calculation provided by your insurance broker / agent and what an appraiser does? Did your insurance broker physically inspect your house & outbuildings? Have they ever been physically present at your home, and measure your home, garage, decks, etc.? Did they verify with their own eyes, what they were told on the phone to ensure the data they're using is accurate, before entering it into the replacement cost calculator? Coldstream Property Appraisals Inc. will do all of this to make sure accurate data is used to determine a replacement cost.

If you have never had your home or business builidngs inspected by the insurance company your broker or agent has placed you with, how do they know for sure what you have? You have two options if you disagree with the amount of insurance your company is asking / insisting you put on your home. You can ask your broker / agent to send an inspector out to your home to see your home, take measurements, and verify the quality of materials & construction of your home, which theoretically should lead to a more accurate replacement cost. If your insurance company agrees to do this, they will pay for the cost of this. However, most insurance companies limit their inspections to high valued homes or homes that potentially have hazards & perils they're generally not comfortable insuring. It's not a guaranteed thing that your insurance company will agree to spend the money to send out an inspector.

The other option you have is to order your own appraisal to calculate a replacement cost, which you can then take to your insurance broker or agent, to state your case on how much insurance you think is required for your home or business buildings. There's no guarantee they will accept it, but if the insurance company your broker has placed you with, will not inspect the home, and you did pay for an inspection, there's a chance they will rely upon your information. The cost of the appraisal may seem a lot considering the annual premium cost of your property policy, but at the end of the day, the point is to ensure you have the correct amount of insurance. Nobody that has insurance wants to have too much, but also nobody wants to come up short if there's ever a claim. The other thing to consider are the extra annual premiums you will pay (or have already paid) across a number of years if you are over-insured, or the cost you would have to bear on your own, if you are under-insured, to put yourself back into the same situation you were in before in the unfortunate event of a claim.

Your own appraisal will help accomplish the balance you're looking for.

Claims Settlement Offers - Actual Cash Value....aka Market Value:

Some properties can only be covered for actual cash value, by a number of property insurance companies, also known as market value (replacement cost - depreciation (physical and other forms) = market value). If you own such a property, and you have the misfortune of having a loss to your property that is deemed to be a total loss (cost to repair what is left, is more than the cost to just pay out the actual cash value / market value of a property before it was damaged), you may receive a pay-out offer that you don't believe is an accurate reflection of it's actual cash value / market value. An appraisal can help you negotiate with your insurance company's claims department in a credible manner. No guarantee it will get them to change their mind, but it may certainly help.