3 Ways to Make Property Insurance Appraisals Less Painful
Property insurance appraisals are necessary, but often can seem like a painful process. Part of what makes them seem painful cannot be helped. By nature, property insurance appraisals require a thorough evaluation of a building’s components, including its core construction materials, the size of the building (square footage), average height, roofing construction and materials and safety features. The appraiser will need complete access to a building in order to gather data.
Other elements, though, can be refined. There are ways to maximize the utility of the insurance appraisal and streamline the process to make it easier for all parties involved.
Why Are Insurance Appraisals Important?
Before getting into the specifics of how the appraisal process can be improved, it’s helpful to remember why the process is important. Insurance appraisals help property owners and their property insurance brokers quantify the value of the property being insured. The appraisal verifies buildings are appropriately valued. If they are overvalued, the property owner risks paying too much for insurance coverage or paying for coverage it doesn’t need. If the property is undervalued, the property owner risks being underinsured if it would ever need to make a property insurance claim.
It’s unlikely a property insurance appraisal was conducted at the onset of a property insurance policy. Having accurate data and values are important and so is keeping that data up-to-date for the property insurance renewal. Property values change over time. New construction or renovations to the business may not be reflected on the Statement of Values provided to your property insurance company. Property owners that are missing COPE data about their buildings might also find they have higher insurance premiums. Insurance appraisals help supply the data that can be used to optimize coverage and pricing.
Be in Charge of the Timing
One of the biggest obstacles to property insurance appraisals is timing. Property insurance renewal cycles are a good time to get an updated insurance appraisal. Unfortunately, companies may wait too long before the end of their policy before they try to conduct the appraisal. If you wait until you receive the notice about your insurance renewal, your company may only have a very limited time for an appraisal specialist to come out to the business and collect the necessary data.
Being in charge of timing also helps ensure that your company has the budget to hire an insurance appraiser before the property insurance cycle renews.
Business owners can stay on top of the timing by being proactive with the insurance appraisal. If you know that your company has made significant changes to its building or if it has been years since the last physical appraisal, you should consider bringing out an insurance appraisal specialist to capture that structural update for your next coverage renewal cycle.
Streamline Data Collection
Another common pain point involves the property owner’s involvement in the appraisal data collection process. An insurance appraisal specialist will need access to all of your buildings and may need to be shown around each location. Insurance appraisal specialists take notes on the building’s construction materials and features, including the quality of the construction, provide all COPE data, measure the building for accurate square footage, and provide GPS coordinates and other relative underwriting data about the building. All of this goes into the building’s pricing and a final report to your management team.
Increasingly, insurance appraisal specialists are using cloud-based software and other technologies to expedite the data collection process. Platforms like Origami Risk enable insurance appraisers to spend less time at each building because the information collection process is digitized and stored on a cloud system.
Cloud-based software enables faster turnaround for the final appraisal report as well because as the information is entered, it can be reviewed off-site. Software dashboards also enable year-over-year comparisons, and allow appraisers and management teams the ability to review historic and current appraisal data.
Looking for an insurance appraiser that uses cloud-based software can help management teams have real-time access to their insurance appraisal process and to the data being collected.
Ensure You Have a Quality Appraiser
The amount of data that must be collected or supplied from a company for a property insurance appraisal can lead to a significant time investment from your management team. Experienced insurance appraisers will have a clear delineation of information that the company needs to provide versus the information that the appraiser can collect independently.
Coordination is everything when it comes to making an insurance appraisal less time-consuming. Management teams can cut down their appraisal time by enlisting the help of a professional with a clear project plan and timeline.
For more information on the insurance appraisal process, contact us.