Statement of Values. The Foundation of Property Insurance

The foundation of a property insurance submission is the Statement of Values (SOV). This single item is often the point where your insurance submission is either declined or considered. What you need to know to get your property submission considered.

Address

It would seem that having the correct address would be a basic item. Unfortunately, this is not always the case. To be useful, your address must accurately geocode to the exact location of the property risk. It is common for a risk with multiple buildings to list them all at a single address. This can be a costly simplification.

A university listed all of their buildings at a single address. The mapping program placed the address on the main road. The athletic field was over 1 mile away along the riverbank. When the river flooded, the artificial turf was washed away. The insurance company declined to pay the claim as the FEMA Flood Zone associated with the address given was Zone X, but the athletic field was in Zone A. The policy specifically excluded coverage for floods outside the zone shown on the policy. This was a $500,000 lesson

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Address structure and CAT models

How is your address listed on your SOV? With the prevalence of catastrophe models, the ability to easily transfer your address data into a CAT model can be a choice point for an insurance company. Is your data arranged to allow easy transfer to a catastrophe model? If not, the insurance company must decide if converting your data to their needs is an expense they care to absorb. For large schedules, this is a factor that will affect your access to insurance markets. The phrase, “The juice is not worth the squeeze” has been frequently used to pass on an SOV that required significant editing to model.

Occupancy

What is the occupancy at the address? The insurance rating process depends on accurately identifying the occupancy being insured. Allowing a third party to populate this data element can lead to outdated information. There are occupancy classifications that sound alike but have significant differences in premium generation and value estimates.

Construction Classification

Construction of the building seems to be a simple question. Within the insurance business the construction classifications for personal lines are different than commercial lines.

The insurance industry uses an Insurance Services Office (AKA Verisk) construction classification that is different from the building code (IBC). We have a matrix to make this conversion. The catastrophe models must have either the ISO or IBC construction class to translate to their construction classes.

If your building is of mixed construction types, knowing the percentage of each type will allow a proper ISO construction class to be determined. Having the underlying percentages may be of use for the catastrophe model if needed.

Building Area

This is a figure that should be immediately available. Unfortunately, most data is estimated or obtained from a third-party site that has not actually surveyed your property. Tax data is a popular source of information. This data is often inaccurate as new additions are not always reported to the taxing authority.

Many building departments do not share data with the tax assessor. Most clients decline to volunteer data to raise their taxes. Tax records often fail to have accurate data on any building that was built with a tax advantaged incentive. Nonprofits also may not be present in tax databases.

Number of Stories

A multi-story building has different loss projection from a single floor building. Multiple stories will affect the area of buildings. If a third-party provider is simply using the building outline from overhead images, it may not indicate the number of stories. An additional data point regarding story height can be important in value estimates. The presence of an atrium will also affect the number of stories and the building area.

Building Age

The age of the building is significant to the insurance profile for that address. Insurance companies and the catastrophe models use the year built and the code standards that were used at that time as a factor in estimating damage potential.

If your 1967 building that has a 2026 roof, 2025 plumbing, and 2019 electrical updates should not be modeled as a 1967 building. Unless you accurately report this information, it will not be used for your benefit. Information on roof wind uplift ratings and hail resistance are important to note.

Value Estimates

Insurance companies will calculate the per square foot cost of your property and compare that to their data on replacement costs. The values are also used in catastrophe models to project damages and the required insurance premiums to cover those damages.  Poor data on number of stories, area and construction class will make this estimate meaningless.

Flood Zones

A good statement of values will include the FEMA flood zone for each building. This requires the correct address information. If there is a FEMA map amendment for a given location, that information should be linked to that location.

The Driehaus Difference

We sell insurance twice. First, we must sell our expertise and ability to represent you. We then must sell your business to the insurance markets and communicate the data in a fashion that allows efficient underwriting and accurate information. For property risks a carefully documented and presented statement of values will place your best foot forward in the process. Call us at 513-977-6860 or contact us via our website, driehausins.com . We want to be your insurance provider.